The National Bank of Georgia has recently introduced regulations pertaining to the registration and operation of Virtual Asset Service Providers (VASPs) in the country, which came into effect on July 1, 2023. As per the approved rules, only legal entities registered with the National Bank or financial sector representatives are authorized to provide virtual asset services in Georgia. 

Additionally, only limited liability companies or joint stock companies registered in Georgia are eligible to offer virtual asset services, and VASPs are prohibited from lending virtual assets

— Virtual Asset Service Providers (VASPs) possess the prerogative to levy charges for services offered, whether in Georgian Lari or in the virtual asset pertaining to the provision of such services

— It is prohibited to provide services through an agent. An Agent is a person acting on behalf of the Virtual Asset Service Provider. Presumably, this refers to the provision of services by a third party on the basis of an agreement concluded with the VASP;

— VASPs must locate their head office in Georgia, and the person responsible for the VASP’s representative office must stay in Georgia for 14 days within a month.

Explanation: VASP is needed for those who are engaged in intermediary activities in the field of cryptocurrency to become official providers, and it is also required for crypto exchanges.

It is important to note that engaging in said undertakings is proscribed under the purview of a sole proprietorship, as registration of a limited liability company or joint stock company is requisite.

In order to secure authorization, the petitioner shall be required to compile a comprehensive dossier of documentation and complete multiple application forms. Additionally, there exist numerous prerequisites to fulfil and substantiation of adherence to be furnished. Following a thorough review of the matter, our firm is equipped to apprise our clientele of these particulars during consultation. A subset of the novel provisions shall become operative as of July 1, 2023, with the remaining set to take effect on January 1, 2024.