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Crypto M&A

Does the VASP registration transfer with the company sale?

Yes, the registration belongs to the legal entity. However, the National Bank must be notified of the change in beneficial owners, who must pass fit-and-proper tests.

Is crypto subject to VAT in Georgia?

No, the supply of crypto assets (exchange for fiat or other crypto) is exempt from VAT in Georgia.

How do you verify crypto assets during Due Diligence?

We work with technical experts using blockchain analytics tools to trace asset origins and ensure wallets are not tainted by illicit activities.

Can I pay for shares with cryptocurrency?

Yes, crypto can be used as a means of payment or non-monetary contribution to capital, provided it is properly valued by an independent auditor.

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Crypto M&A (Mergers and Acquisitions) is one of the fastest-growing yet most complex areas of corporate law in Georgia. Since Georgia established itself as a regional hub for cryptocurrencies and blockchain technology, interest in acquiring and selling companies with digital assets has surged. Unlike traditional M&A transactions, acquiring a crypto company requires specific knowledge not only in law but also in technology and financial regulations. Asset valuation, secure transfer of digital wallets, intellectual property rights over code, and regulatory compliance — these are issues that, if ignored, can expose an investor to serious financial and legal risks. Specialists represented on the Legal.ge platform possess unique expertise in this niche field, ensuring transaction security and legality.

What Does Crypto M&A Service Cover?

Acquiring or merging with a crypto company involves a multi-layered legal process. Our platform lawyers offer:

  • Specialized Due Diligence: Beyond traditional auditing, checking smart contracts, digital asset ownership, key management protocols, and cybersecurity measures.
  • Regulatory Compliance (VASP): Analyzing compliance with the National Bank of Georgia's regulations, specifically "Virtual Asset Service Provider" (VASP) registration and AML/KYC standards.
  • Asset Valuation and Transfer: Agreeing on methodologies for valuing cryptocurrencies and tokens and developing secure transfer schemes (e.g., using Multi-sig wallets).
  • Deal Structuring: Deciding whether to pursue a Share Deal or an Asset Deal (technology purchase) considering tax efficiency.
  • Warranties and Liability: Including specific Representations & Warranties in the contract regarding code cleanliness, absence of hacks, and legal origin of assets.

Real-World Scenarios When You Need This Service

Involvement of a Crypto M&A lawyer is essential in the following scenarios:

  • Acquiring a Crypto Exchange: When an investor buys an existing Georgian crypto exchange, checking VASP license status and customer asset segregation is critical.
  • Buying/Selling a Mining Farm: When acquiring a mining business, reviewing electricity contracts, equipment ownership, and tax history is vital.
  • Acquiring a DeFi Project: In purchasing a decentralized finance protocol, the main focus is on intellectual property (code) and retaining the developer team (Acqui-hiring).
  • Entry of a Foreign Company: When an international crypto giant acquires a local startup, the transaction needs to be harmonized with Georgian legislation.

Georgian Legal Framework and Regulations

The crypto sector in Georgia is regulated by several key acts. Primarily, the Organic Law of Georgia "On the National Bank of Georgia" and Orders of the President of the National Bank regarding VASP registration rules. Also crucial is the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism, which imposes strict obligations on crypto companies. The Law on Entrepreneurs (share transfer) and Civil Code apply during the M&A process. regarding taxation, the Tax Code of Georgia and orders from the Minister of Finance define the specifics of crypto asset taxation (e.g., VAT exemption on crypto supply). A qualified lawyer ensures full transaction compliance with these complex regulations.

Service Process

Through Legal.ge, the Crypto M&A process proceeds in stages:

  1. Initial Consultation: Discussing the transaction structure and goals.
  2. Legal and Technical Due Diligence: Detailed study of the target company's risks.
  3. Document Preparation: Drafting the Share Purchase Agreement (SPA) and Shareholders' Agreement (SHA) considering crypto specifics.
  4. Regulatory Interaction: Sending notifications or obtaining consent from the National Bank if necessary.
  5. Closing: Secure transfer of shares and digital assets.

Why Choose Legal.ge?

The crypto industry does not forgive mistakes. An improperly executed deal can lead to the permanent loss of assets or severe fines from the regulator. Legal.ge gives you access to lawyers who understand both blockchain technology and corporate law. With our help, you can invest in a fast-growing industry with minimal risk.

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