Georgia Central Bank To Launch AML Probe Into Crypto Companies

Updated: 01 June 2023

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The Central Bank of Georgia plans to launch mandatory supervision of digital asset service providers. Georgia, a significant crypto-friendly country among Post-Soviet states, is preparing to start monitoring crypto platforms. This is to prevent money laundering and comply with imposed sanctions.

Further, the National Bank of Georgia (NBG) plans to launch mandatory supervision of virtual asset service providers (VASPs) commencing September 1, 2023. Archil Mestvirishvili, NBG’s acting governor, noted that the new regulatory measures would help the country combat money laundering, the local news agency InterPressNews reported on May 31.

Nonetheless, in line with Anti-Money Laundering considerations, the upcoming VASP probe is expected to maximize the country’s compliance with Western sanctions against Russia and Belarus.

Notably, Mestvirishvili asserted that NBG is among the foremost authorities supervising compliance with those sanctions. However, the supervision was especially active last year when global jurisdictions like the United States and the European Union imposed sanctions against Russia. He further added:

We have created an additional department for monitoring sanctions. The enforcement of the sanctions is critical, and the financial sector takes it very seriously

Central Bank Measures

Further to the VASP supervision, the NBG is, on the other hand, preparing to enforce significant restrictions for foreign bank account holders. Commencing September 1, Russian citizens will be prohibited from withdrawing more than 20% from their savings accounts immediately.

Further, as per the central bank, such measures support Georgia’s economic stability amid the increasing Russian foreign currency deposits. Reportedly, the regulator stated, “Since this capital inflow may be temporary, it’s better to keep it in liquid funds.”

Nonetheless, the recent developments come amid the Georgian government preparing to approve cryptocurrency-related legislation in the autumn session. However, previously reported, a local draft bill on crypto regulation aims to coordinate local laws with central European Union directives and provide legal status to entities involved in digital asset trading.

Significantly, the upcoming crypto rules are designed to prevent the use of crypto for money laundering and terrorist financing and help Georgia become a significant global crypto hub.

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