Virtual Asset Service Providers (VASP) Georgia | Legal.ge

VirtualAssetServiceProviders

Do I need VASP registration for a non-custodial wallet?

Generally, non-custodial wallets (where users hold their own keys) do not fall under VASP regulations in Georgia, but a legal opinion is recommended to be sure.

Can a foreign company register as a VASP in Georgia?

Yes, but you must establish a local branch or subsidiary, have a physical office in Georgia, and appoint local management/compliance officers.

How long does VASP registration take?

The process usually takes 2 to 4 months from application submission, depending on the quality of documentation and NBG's workload.

Introduction: Who is a VASP and What Are the Requirements?

With the development of the digital economy in Georgia, the state has introduced strict and clear regulations for Virtual Asset Service Providers (VASPs). A VASP is any natural or legal person that offers services such as exchanging virtual assets (for fiat currency or other crypto assets), transferring, safeguarding (custody), and/or administering them. Since 2023, operating as a VASP in Georgia without registration is prohibited. This service aims to help companies navigate the complex regulatory maze, obtain legitimate status, and meet the high standards of the National Bank.

Having VASP status is not just a bureaucratic obligation; it is a mandate of trust for clients and partner banks. Unregistered activity leads to substantial fines and potentially criminal liability. Professional lawyers will help you analyze your business model to determine if you need VASP registration and how to prepare for it.

What VASP Legal Services Cover

This service covers the entire lifecycle of VASP operations:

Status Determination: Preparing a legal opinion on whether your specific business model (e.g., NFT platform, Wallet App, P2P marketplace) is subject to mandatory registration.
Internal Policy Development: Creating Anti-Money Laundering and Counter-Terrorism Financing (AML/CFT) policies that meet FATF standards and National Bank requirements.
Compliance Officer Selection/Training: Assisting in finding a qualified candidate or training existing staff, as this is a mandatory position.
Software Audit: Legal oversight of the implementation of transaction monitoring software (Chainalysis, Elliptic, etc.).
Travel Rule Implementation: Setting up technical and legal protocols for information sharing with other VASPs.
Reporting: Establishing a reporting system with the Financial Monitoring Service.

Common Scenarios and Use Cases

VASP regulations affect a wide range of businesses:

Opening a Crypto Exchange: A startup wants to create a Georgian crypto exchange where users can buy Bitcoin with GEL. This is a classic VASP activity.
Crypto ATM Network: A company wants to install kiosks in Tbilisi where crypto can be purchased with cash.
OTC (Over-the-Counter) Desk: A firm offers large investors the ability to buy and sell cryptocurrency at market rates outside of an exchange.
Wallet Application: If the app stores the user's private keys (Custodial Wallet), it is a VASP. If it is only an interface (Non-custodial), regulation might not apply (requires analysis).

Georgian Legislation and Regulations

The main regulatory document for the sector is the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism, which introduced the concept of VASP. This is supplemented by the Order of the President of the National Bank of Georgia "On Approving the Rules for Registration, Deregistration, and Regulation of Virtual Asset Service Providers". This order details registration requirements, "Fit and Proper" tests for directors, and operational rules. Also important are the Orders of the Head of the Financial Monitoring Service of Georgia regarding the submission of information on suspicious transactions.

Process of Working with a Specialist

The process typically includes:

GAP Analysis: Comparing the current state with legal requirements.
Structuring: Setting up the company's governance structure (Supervisory Board, Directorate).
Document Preparation: Creating over 20 mandatory documents (policies, procedures).
Application Submission: Submitting the registration application to the National Bank.
Interview: Preparing for and attending interviews with National Bank representatives.

Why Choose Legal.ge?

VASP registration and subsequent operation is one of the most complex processes in modern Georgian business law. Legal.ge connects you with lawyers who have already walked this path and successfully registered providers with the National Bank. Their experience will save you time and money and protect you from critical mistakes.