As of 1 January 2023, the new Georgian regulation, which follows the latest FATF recommendations, came into force. According to the new draft law, the registration of virtual asset service provider (VASP) is mandatory, and VASPs are subject to AML/KYC regulations as well as other new rules regarding VASPs.
According to the legislation of Georgia, virtual asset services are defined as:
exchange of a convertible virtual asset (including through a self-service kiosk) in national or foreign currency, another virtual asset, or financial instrument;
transfer and/or storage/administration of a convertible virtual asset or an instrument necessary for its use, which allows control over a virtual asset, management of a portfolio consisting of convertible virtual assets (except collective portfolio management);
administration of a trading platform for convertible virtual assets and/or lending of such virtual assets;
initial offer and/or services related to the initial offer.
Any person carrying out any of the above activities is considered a virtual asset service provider. An exception is when a person is already registered as a type of financial institution that is authorized by law to provide virtual asset services.
A person who, before the implementation of this law, carries out activities that include the provision of virtual asset services for the benefit of another person, is obliged to submit relevant registration documents/information to the National Bank within 90 calendar days after the implementation of the legal act of the National Bank on the procedure for registration of VASPs.
A person is authorized to continue servicing virtual assets for the benefit of another person until the relevant decision is made by the National Bank. In case of non-submission of registration documents/information within the term above or in case of refusal of registration by the National Bank, the person is obliged to stop providing virtual asset services.
As for the EU perspective, AMLD will be amended to comply with FATF´s updated guidance in relation to crypto-assets. Under the amendment, crypto transfers above EUR 1000 between exchanges and unhosted wallets owned by an individual will need to be verified and reported to the national authorities. However, private wallets and person-to-person transfers conducted without a provider do not fall under the requirements of the “travel rule” and do not require reporting.
Also, after amendments, AMLD will most likely apply to every crypto asset service provider established by MiCA. According to MiCA, such services are the following:
the custody and administration of crypto-assets on behalf of third parties;
the operation of a trading platform for crypto-assets;
the exchange of crypto-assets for fiat currency that is legal tender;
the exchange of crypto-assets for other crypto-assets;
the execution of orders for crypto-assets on behalf of third parties;
placing of crypto-assets;
the reception and transmission of orders for crypto-assets on behalf of third parties;
providing advice on crypto-assets.
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