A Crypto-Company Transaction and Accountable-Person Status
The purchase and sale of a crypto-company in Georgia is not merely a corporate transaction — it simultaneously falls under the regime of the Law on Facilitating the Suppression of Money Laundering and the Financing of Terrorism. Article 3 of that law names the virtual asset service provider directly among the financial institutions in the list of accountable persons. This means that a large transaction of an enterprise owning a crypto business takes place under dual regulation: the rules of corporate law determine the transfer of the share, while accountable-person status imposes preventive duties upon it.
Article 2 of the law creates the common language of this regime: accountable person, client, business relationship, one-off transaction, identification, verification, beneficial owner — each of these concepts is defined, and it is on them that the law builds its requirements. For the parties to a transaction this means that in the acquisition process identification and verification procedures, the discovery of beneficial owners and the fixation of the scope of the business relationship are to be expected — regardless of the amount of the transaction.
The Transfer of a Convertible Virtual Asset
The central norm for crypto transactions is Article 17-1 of the law. Under its first part, a transfer of a convertible virtual asset is an operation performed by the initiator, or on his instruction or with his consent, by digital means, to make the convertible virtual asset available to the recipient. In a transfer the initiator and the recipient may be one and the same person, or both parties may be served by one and the same provider.
In the context of the transfer of a business this definition is construed broadly: the movement of assets connected with a change in the control structure of the company is examined with the same care as an ordinary payment. When structuring the acquisition it must therefore be assessed in advance which elements count as a transfer and which requirements arise concerning accompanying information.
Accompanying Information and the Recipient Provider’s Duty
Under the second part of Article 17-1, the virtual asset service provider is obliged to ensure that a transfer or receipt of a convertible virtual asset is accompanied by the accompanying information defined in the manner established by the supervisory body. This means that the protocol of the transaction is not merely a contractual detail — it is the carrier of regulatory content.
The third part imposes an additional legal check on the receiving side: the provider of the recipient of a convertible virtual asset must examine whether a ground for submitting a report exists, where the transfer does not fully contain the identification data of the initiator or the recipient of the transfer, in accordance with the manner defined by the supervisory body. In practice this means that a transaction entering with incomplete data will not automatically be rejected, but the recipient provider acquires the duty of examination and, where necessary, of reporting.
The Practical Stages of Structuring the Transaction
When planning the acquisition of a crypto-company, an experienced lawyer defines several stages. The first is a status check: determining whether the target company is a virtual asset service provider and, accordingly, an accountable person. The second is an inventory of transfers: a list of the assets that move under the transaction and that may be counted as a transfer of a convertible virtual asset. The third is the preparation of the accompanying information in accordance with the rules of the supervisory body.
The fourth stage is the identification of the parties and the discovery of the chain of beneficial owners within the concepts of Article 2: whether we have a business relationship or a one-off transaction, who the client is and who the beneficial owner is. A correctly planned process neither delays the transaction nor exposes the parties to the risk of unlawful action; an incorrectly planned one causes both together.
Frequently Asked Questions
Is a crypto-company an accountable person?
Where it is a virtual asset service provider — yes: Article 3 names it among the financial institutions, which imposes preventive duties.
What is a transfer of a convertible virtual asset?
Under Article 17-1, it is an operation performed by digital means to make the asset available to the recipient, by the initiator or on his instruction and with his consent.
What information must accompany a transfer?
The accompanying information defined in the manner established by the supervisory body; the provider is obliged to ensure its presence.
What happens with incomplete identification data?
The recipient’s provider examines whether a ground for reporting exists and, where necessary, submits a report.
How We Help on Legal.ge
On Legal.ge we assist in the full cycle of a crypto-business transaction: we will assess the status of the target company, define the regulatory footprint of the transfers, prepare the accompanying information and identification documentation, and protect your interests in negotiations and in relations with the regulator. Contact our team at the early planning stage of the transaction.