Georgia central bank launches AML investigation into crypto companies

Georgia, a leading cryptocurrency-friendly country among post-Soviet states, is preparing to monitor crypto companies to prevent money laundering and comply with the sanctions.

The National Bank of Georgia plans to introduce mandatory monitoring of Virtual Asset Service Providers (VASP) from September 1, 2023.

Local news agency InterPressNews reported on May 31 that Archil Mestvirishvili, acting governor of the NBG, said the new regulatory measures would help the country fight money laundering.

In line with anti-money laundering considerations, the upcoming VASP investigation is expected to increase the country’s compliance with Western sanctions against Russia and Belarus.

Mestvirishvili said the NBG is one of the main authorities monitoring compliance with those sanctions. The oversight was particularly active last year when global jurisdictions such as the United States and the European Union imposed sanctions against Russia, he said, stating:

“We have set up an additional department to monitor the restrictions. Sanctions enforcement is very important and the financial sector takes it very seriously.”

In addition to VASP supervision, the NBG is also preparing to implement a number of key restrictions for foreign bank account holders. As of September 1, Russian citizens are not allowed to withdraw more than 20% directly from their savings account.

According to the central bank, such measures are designed to support Georgia’s economic stability amid rising foreign currency deposits by Russians. “Since this capital inflow may be temporary, it is better to keep it in cash,” the regulator said.

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The news comes as the Georgian government is preparing to pass a cryptocurrency-related law during its fall session. As previously reported, a local crypto regulation bill aims to harmonize local laws with major EU directives and give legal status to entities involved in digital asset trading.

The upcoming crypto regulations aim to prevent the use of crypto for money laundering and terrorist financing purposes and help Georgia become a major global crypto hub.

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