Regulated Cryptocurrency License in Georgia for Secure Trading

Currently, Georgia requires firms functioning in crypto-currency to possess a license from Central Banking facility. Crypto-companies need to be approved National Banking establishment as VASP-structure. Georgian legislative basis is essentially grounded on EU MiCA-rules; it aims to ensure transparency, uniformity and safeguard. This article looks at what modifications the new reality has brought for crypto-business in Georgia.

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Regulation and privileges of crypto-business in Georgia

Anyone in Georgia may implement crypto-currency deals, such as exchange and storage being in charge to obtain a special license. Practically, there was no legislative basis to supervise these business-activities.

Nevertheless, with beginning of 2023, situation changed: new legislative points appeared demanding registration of firms dealing with cryptocurrency with local authorities.

Activities of VFA-operators cover next-mentioned types of operations.

1. Operations for VFA transfer, storage and controlling.
2. Managing functioning of trading platforms.
3. Exchange, including self-service terminals, in both locally-used and foreign currencies or other digital means.
4. Converting virtual means into financial tools.
5. Organization of initial placements.
6. Providing services related to initial offerings.
7. Individual portfolios, excluding mass portfolio management.
8. Providing loans against crypto-currencies.

New legislative basis doesn’t apply to deals not being intended to be transferred or implemented as a payment or investing means, such as loyalty-programs, game points and other types limited to use in closed virtual-space. New law doesn’t cover supervision of NFTs.

How to get a crypto-license in Georgia

To get a permit to become a Crypto Provider, register a firm and make business-activities legal, you need to fulfill a plenty of requirement points related to various aspects.

Director

Firm may hire 1 director with residency if founder and director are different persons. If organization possesses 1 founder, who is a director, it’s mandatory to find a second director.

Director of the company needs to possess a university degree in economics, finance, banking, business administration, auditing, accounting, law, information technology, information analytics or another related field. Working expertise might be accepted as a substitute for education norms when working in a management position in such industry.

1. Clean before legislative bodies: no previous convictions for serious crimes such as terroristic operations financing or illegal monetary means circulation are needed. It’s essential to avoid violations of business, banking or financial legislative norms.
2. Fiduciary duties: it’s essential to uphold fiduciary duties to financial establishments and avoid actions being detrimental to service providers.
3. Reliability: it’s mandatory to avoid breaches of obligations and insolvency, and possess financial stability to avoid bankruptcy.
4. Avoiding conflicts of interest: it’s prohibited to administer 2 providers of one group.
5. Presence locally: 1 authorized person representing a firm needs to be located locally for 14-day-period per month.

Our team guarantees you highly-qualified assistance in bringing your business-activities into correspondence with mandatory requirement points. We’ll assist you in getting other permits, particularly, EMI-licenses in Lithuania, Estonia, Latvia, Germany and others.

Beneficiaries of the company

1. No criminal record for serious economic crimes.
2. Correspondence with business-making, banking and financial legislative points without practices threatening normal operation of organization or whole sector.
3. Lack of unfulfilled obligations and insolvency status.

Firm office-space

1. To register VASP in Georgia, main office-space from where business-activities are managed needs to be present locally.
2. Main office-premises should be clearly separated from other spaces not used for similar purposes.
3. Estates and machinery need to meet rules and standards for effective supervision and control of company’s activities.
4. Firm needs to keep systematic records of its transactions and design mechanisms to ensure transparency.
5. In case of on-site transactions, specifically when exchanging, installation of video surveillance systems is needed.

Electronic systems

Before starting functioning, it’s mandatory to install soft (electronic) systems, which need to be adapted to scale of business-activities and risks of ML/TF. These systems should automatically detect suspicious transactions using special technologies (DLT).

Firms applying for cryptolicense in Georgia need to submit a detailed service-plan. Supervision authority may demand a demonstration of e-systems used to offer services.

To obtain a permit, you need to submit next-mentioned date about e-systems used to provide services:

• names of e-systems;
• manufacturer’s website;
• location of data about systems;
• AML/TF-policies.

License applicants need to develop internal guidelines (policies and procedures) to implement a correspondence controlling systems to prevent illegal monetary means circulation. Supervision authority carefully reviews this documentation, so firms need to be prepared to guarantee transparent information about their business-activities.

Additionally, firms need to implement correspondence monitoring systems to prevent illegal monetary means circulation in accordance with 12-point-plan.

Internal AML/TF-instructions

1. Creation of internal rules to prevent illegal monetary means circulation
2. Assess risks in accordance with applicable law.
3. Application of preventive measures in accordance with law.
4. Implementation of software for verification of persons subject to sanctions.
5. Deployment of systems for detecting suspicious/unusual transactions.
6. Preservation of data and documentation in accordance with procedures and deadlines set by law.
7. Hiring of a person being in charge of functioning of correspondence controlling systems.
8. Appointment of a member of management apparatus or a person with authoritative-status over effectiveness of correspondence controlling systems.
9. Conducting an independent audit to confirm effectivity of correspondence controlling systems.
10. Establishing personnel choosing criteria to recruit qualified and reliable persons.
11. Implementation of correspondence controlling systems for regular training.

Terms for getting a permit

Authoritative body needs to make a decision on issuing a permit within 2-month-period from date of application sending. Nevertheless, this period may vary if regulator needs supplementary  documentation. It’s mandatory to note that now there aren’t restrictions or prohibitions regarding cryptocurrency at the level of financial regulator or Georgian government.

Taxation

Income tax-rate for business-activities in this category is 20%. Tax on profit received from operations is 15%. Dividends are covered by 5%-tax.

How much does a crypto-license cost in Georgia?

The cost of this type of permit depends on plenty of third-party nuances, and therefore is covered by individual calculation in each case. Our experts will prepare a preliminary price calculation for you before cooperation begins. This way you can estimate the total cost of our services.

Expert services

Our team specializes in providing services for getting licenses for crypto-currencies in Georgia and others, offering a plenty of significant privileges for our clients:

• experts have in-depth knowledge of legislative and licensing norms, providing highly-qualified support at all phases of getting permits in different countries;
• we provide individual consultations, bearing in mind unique needs and characteristics of each firm;
• we provide a fully-covering range of services, including preparation of mandatory documentation, interaction with regulative authorities and advice on compliance with all rules and standards;
• a wide range of permits and companies for sale, particularly, EMI-licenses in Switzerland and others;
• lawyers maintain excellent relationships with regulators, resulting in more efficient communication and reduced time-period required to get a permit.

Thanks to our expertise and highly-professional approach, we help clients speed up process of getting a permit and optimize costs.