Georgia

Okay, here is the comprehensive report on the current status of retail cryptocurrency trading in Georgia.
## Report: Retail Cryptocurrency Trading Status in Georgia

**Topic:** Retail_Trading_Status
**Description:** Assess whether individual citizens and residents in the country are legally permitted to buy, sell, and hold cryptocurrencies. Detail the regulatory environment surrounding this activity (e.g., KYC/AML requirements imposed on platforms, general warnings issued).

**Status:** **Allowed-Regulated**

**Narrative Explanation:**

Individual citizens and residents in Georgia are legally permitted to buy, sell, and hold cryptocurrencies. Owning and trading crypto assets is legal for individuals. However, the regulatory landscape has significantly evolved, moving from a largely unregulated environment to a regulated one, particularly concerning the service providers facilitating these activities.

Historically, Georgia was known for its relaxed stance on cryptocurrency, attracting significant mining activity due to low energy costs and minimal regulation. While cryptocurrencies were never recognized as legal tender (the Georgian Lari remains the sole legal currency), individuals faced few restrictions on personal trading and holding.

The major shift occurred with legislative changes that came into force on January 1, 2023, and further regulations established by the National Bank of Georgia (NBG) effective July 1, 2023. These changes were driven by the need to align with international standards, particularly the Financial Action Task Force (FATF) recommendations, and Georgia's aspirations regarding the Single Euro Payments Area (SEPA). The primary goal was to mitigate the risks of money laundering and terrorist financing (ML/TF) associated with virtual assets.

The core of the new regulation focuses on Virtual Asset Service Providers (VASPs). These are defined as entities providing services like exchanging virtual assets (crypto-to-fiat, crypto-to-crypto), transferring virtual assets, custody/administration, portfolio management, operating trading platforms, crypto lending, and facilitating ICOs *for the benefit of others*.

Key aspects of the current regulatory environment include:

1.  **Mandatory VASP Registration:** Entities wishing to provide virtual asset services must register with the National Bank of Georgia (NBG). Only legal entities (LLCs or JSCs) registered in Georgia can become VASPs, and they must have a physical presence.
2.  **NBG Supervision:** The NBG is the supervisory authority for VASPs, overseeing their activities concerning AML/CFT compliance and adherence to regulations. The NBG has the power to conduct inspections and impose sanctions.
3.  **AML/CFT Requirements:** Registered VASPs are obliged entities under Georgia's AML/CFT laws. They must implement robust AML/CFT policies, conduct customer due diligence (CDD), including Know Your Customer (KYC) procedures as required by the NBG, monitor transactions for suspicious activity, and report accordingly. This directly impacts retail users interacting with these platforms, as they will be subject to identity verification and transaction monitoring.
4.  **Restrictions on VASPs:** VASPs face certain prohibitions, such as dealing with unregistered/unlicensed entities, providing services involving anonymity-enhanced privacy coins, or lending virtual assets to individuals.
5.  **Individual Traders:** Importantly, the regulations explicitly state that individuals trading or mining crypto *for their own purposes* are not considered VASPs and are not subject to the VASP registration requirements. However, when they use the services of a registered VASP (like an exchange), they will interact with a regulated entity and must comply with its KYC/AML procedures.
6.  **Legal Tender Status:** The law explicitly confirms that virtual assets are not legal tender in Georgia. Payments using virtual assets are generally prohibited, except for specific cases necessary for providing VASP services (e.g., a VASP receiving fees in crypto).

In summary, while individuals retain the right to trade and hold cryptocurrencies, the platforms and services they use to do so are now subject to comprehensive regulation by the NBG, primarily focusing on AML/CFT compliance. This makes the status "Allowed-Regulated".

**Supporting Excerpts & Sources:**

1.  **Status of Individual Trading:**
    *   "Owning and trading cryptocurrency is legal in Georgia." (Source 7)
    *   "The resolution of the National Bank does not apply to persons who buy and sell cryptocurrencies and engage in mining themselves. Only intermediaries need to be registered for transactions..." (Source 7)
    *   "Individuals who use such services for their own purposes, such as exchanging their own virtual assets, are not considered VASPs, unlike persons who provide the above services for the benefit of others." (Source 3)

2.  **Introduction of Regulation for VASPs:**
    *   "On January 1, 2023, the legislative changes related to virtual assets came into force in Georgia. The legislative framework, among other things, establishes the Virtual Asset Service Providers' (VASPs') mandatory registration regime at the National Bank of Georgia (NBG)..." (Source 6, Source 13)
    *   "As of July 1, 2023, final regulations have entered into force to establish a dedicated legal framework applicable to virtual assets in Georgia. Consequently, the flow of virtual assets in Georgia is fully supervised by the National Bank of Georgia (referred to as the “NBG”) and virtual asset services can be provided only by those entities which register with the NBG as virtual asset service providers (VASPs)..." (Source 3)

3.  **AML/CFT and KYC Requirements:**
    *   "VASPs shall also fulfill the AML/CFT obligations set out by the NBG by implementing preventive measures... VASPs are also required to follow KYC requirements pre-agreed with the NBG..." (Source 3)
    *   "The VASP must identify and verify the client in accordance with the process required by NBG." (Source 4)
    *   "VASPs became subject to AML/CFT requirements following amendments to the Law of Georgia on Facilitating the Suppression of Money Laundering and Terrorist Financing, which entered into force on January 1, 2023... Following MONEYVAL's recommendations, VASPs became regulated entities with an obligation to undertake AML/CFT compliance procedures." (Source 12)

4.  **Legal Tender Status:**
    *   "It is official – a Virtual Asset is not a form of legal tender... The only legal currency for transactions in Georgia has always been and remains the Georgian Lari." (Source 5)
    *   "According to Organic law of Georgia “On the National Bank of Georgia” regarding amendments to the Organic Law of Georgia, the virtual asset is not a legal tender. It is prohibited to make payments with a virtual asset, except for the cases defined by the legal act of the National Bank of Georgia, which are necessary for the implementation of the virtual asset service." (Source 9)

**Source Links:**

*   **Source 3 (Vertex AI Search Result - BLC Law):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqALgnsQ7EP5PZv0RVHCBcF5RY2zS0Vh4O9bdXzayVWeXZQnJ7rQ5-TREL1IakstYPFPPoK5EpbIPDL5b23F0X9ZEWajm01xqT6MYeTiQZ2xkay1w4O69xmPjudstLJpMJ1w_zL8ghZ7DAr12RurIRAn_AR0H-wzchhxh8RbCZHNOAEU80eCEpQ==` (Summarizes the legal framework as of July 1, 2023)
*   **Source 4 (Vertex AI Search Result - Crystal Intelligence):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAIiFpERZ0ekQrMH84MsERn9b9NzhhcP653rOySYBlZawTVLhLcSdRprzbg4UrkWpAQpk52KiRwxs-2QOlHXgTVzRXOz9HZAUD1ahhkRuyg-kKXxNgYl6uepC3XKi9AzVuL7d3-OQaIR6rpHaIm8tyvnucGX867atM9vnnr4UHNFsEWklfYwsW91P1q-COA-ZyY4QFz-jQ==` (Details the NBG regulation issued June 13, 2023)
*   **Source 5 (Vertex AI Search Result - ExpatHub):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAI9S_k4aUPoTFKKG0-ntEzkWo5x4aQTbDSMstePXmRLYeRsWEXIAzFZn2aUWQQ-ua5XAQerjvAEhZx4bkJMGt5GrHxX_Na986hN9xFWKr1A2rGddJnAWKqfVMxFGgvo-XRGhMELmei7` (Explains the new regulations and VASP definition)
*   **Source 6 (Vertex AI Search Result - NBG FAQ):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqAJK1kBysAfOIxGUUXuslBGBHbr__wVKbGGtJyXWbxc9ftbHTFAAf5aMnjhqrbdpf6gaRmSw1cK54hEV6UT2FIwerx3xdfcujmvDMZUgKoH4YUhu` (Official NBG page answering questions on virtual asset regulation)
*   **Source 7 (Vertex AI Search Result - LTA Law Firm):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqALPzAvfBM2jjCQ6JpCizrXlNqjkz-r5gVI2ebNml64ub08SLDp9BDN6PraQ8q6MNVjjk1zThrQFCCr8_xDmvZAgs4PGtmh-fwnt7ACwcNBDMINn2uxD5kbpAJZETPSvsIySqU9DrkdESebUqQJ46yBm` (Confirms legality for individuals and mentions VASP registration)
*   **Source 9 (Vertex AI Search Result - Manimama):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqALVGNfUvd7gT_n98ylTYCcipKMBmc4FMdzx4-DZkn6BH7PMT6VrkqCIX-6K5-9n8D3UhOQiOgZ_BcyRrpwZTLixtoIBm8Z47c_tTfEwixQ01gPojw-_HzBSEVh40NnMBNNuLwUIokUNOSSOoulobiJmxPm7Vfh2BefFg2Kp8Nq8P73hXIZJ_fLG` (Details the NBG Order No. 94/04 and VASP rules)
*   **Source 12 (Vertex AI Search Result - Council of Europe):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqALqMwIlTP0M-bxQ4zxzlpSXKFvuyqmh9b3ExbaXgIGDRO5Yp6ewoc2WzD638s1gZWwINDPkGwNefmGcuzFJo2o3u-9r5q7JUPQ4Hz_v21esuVkBTIgGMjB30FdG2tc--bm7EFZZGlY89OXMfGNyKGn2b-fjqUnkQCSGvCFL_NCYkuWoISIEpNPUoDScZRyz8BlhF3wR7YzTVLEj7JIH1WDWa5slYlYogFpvt_-54w==` (Reports on training related to VASP AML/CFT compliance following legislative changes)
*   **Source 13 (Vertex AI Search Result - SBSB Fintech Lawyers):** `https://vertexaisearch.cloud.google.com/grounding-api-redirect/AWQVqALZFgOBBGaQk4gCqasxWsF7XL2Fh3SsgA6sXvjfH50KUe7NFsFiy2kFgnQ1_g9LgMEdou4XgUHG0q6o6XPh59enlyOBmwdFj9cSipQ_4xb1OYa5WjHGrCTn7FiMnymCB38z13Zwq_uD2dI-5J0HzASV9OiZXjg=` (Outlines the VASP registration regime effective Jan 1, 2023)