Georgia On its Way to Launch AML Scrutinies Over Crypto Firms

Georgia, a prominent country in the post-Soviet region that embraces cryptocurrencies, is gearing up to implement measures for monitoring crypto companies. This move aims to counter money laundering activities and ensure compliance with sanctions.

Starting from September 1, 2023, the National Bank of Georgia (NBG) is set to introduce compulsory supervision over virtual asset service providers (VASPs). According to the NBG's acting governor, Archil Mestvirishvili, these regulatory measures will play a crucial role in the country's fight against money laundering, as reported by the local news agency InterPressNews on May 31st.


The forthcoming investigation into virtual asset service providers (VASPs) aligns with the country's commitment to combat money laundering and uphold anti-money laundering standards. Additionally, it is anticipated that this probe will enhance Georgia's compliance with Western sanctions imposed on Russia and Belarus.


Archil Mestvirishvili emphasized that the National Bank of Georgia (NBG) plays a pivotal role in overseeing adherence to these sanctions, with particular emphasis on its active supervision during the previous year. Notably, global jurisdictions such as the United States and the European Union imposed sanctions against Russia, further highlighting the importance of robust oversight.


Apart from the upcoming supervision of virtual asset service providers (VASPs), the National Bank of Georgia (NBG) is making preparations to implement significant restrictions for holders of foreign bank accounts. Effective September 1st, Russian citizens will face limitations on immediate withdrawals from their savings accounts, with a maximum allowance of 20% only.


In light of recent developments, the Georgian government is making strides towards approving cryptocurrency-related legislation during the autumn session. As previously mentioned, the proposed local draft bill seeks to align the country's regulations with significant directives of the European Union and establish a legal framework for entities engaged in digital asset trading.


These forthcoming crypto regulations serve multiple purposes, including the prevention of money laundering and terrorist financing through the use of cryptocurrencies. Furthermore, they aim to position Georgia as a prominent global hub for cryptocurrency activities.

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