Legal Risk Assessment in the digital and financial technology sector is a strategic necessity for any startup or established company. The cryptocurrency, blockchain, and fintech sectors are characterized by high volatility and rapidly changing regulations. The implementation of VASP regulations in Georgia has presented many companies with a dilemma: does their business model comply with the new requirements? Legal risk assessment involves identifying potential threats, ranging from licensing obligations to consumer protection and tax liabilities. A timely audit protects the company from unforeseen fines and reputational damage.
The service involves a deep analysis of the company's activities from technological and legal perspectives. Key areas include:
- Regulatory Gap Analysis: Comparing the business model with current legislation (National Bank regulations, VASP rules) and identifying discrepancies.
- Contractual Risks: Reviewing agreements with clients, partners, and investors (Terms of Service, SAFT) to detect weak points.
- Token Classification: Preparing a Legal Opinion on whether your token constitutes a security, which radically changes the legal regime.
- Consumer Rights: Assessing risks regarding consumer protection laws, especially concerning digital products.
- Litigation Prevention: Identifying potential subjects of dispute and developing preventive measures.
Practical examples demonstrate the importance of risk assessment. Scenario 1: A foreign company starts issuing crypto cards in Georgia without registering as a VASP. A risk assessment would have shown that this activity requires licensing, avoiding charges of illegal entrepreneurial activity. Scenario 2: A startup launches a token (ICO) with dividend-like features. This token could be classified as a security, violating capital market laws. Scenario 3: A company changes its business model from a P2P platform to a centralized exchange (CEX), completely altering its AML obligations. Preliminary assessment ensures a painless transition.
In Georgia, this field is regulated by the Civil Code of Georgia, the Law on Entrepreneurs, the Organic Law of the National Bank, and special regulations regarding virtual assets. Also important is the Law on Consumer Rights Protection, which obliges digital service providers to be transparent about risks. When assessing risks, lawyers also consider international practice (e.g., MiCA regulation in the EU), as Georgian companies often operate globally.
The process begins with a documentation audit and interviews with management. Lawyers create a "Risk Matrix," where risks are ranked by probability and impact. "Mitigation Measures" are developed for each risk. The final product is an action plan that turns legal uncertainty into a manageable process.
Legal.ge is the platform where you will find lawyers experienced in Tech Law. Innovation does not exist without risk, but smart business manages these risks. Protect your investment and reputation with professional risk assessment.
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