National Bank of Georgia: three EU-Sanctioned virtual asset firms founded in Georgia, none regulated or operating locally

The National Bank of Georgia stated on Friday that while three of the 14 virtual asset entities sanctioned in the EU’s latest Russia package were founded in Georgia, none were regulated by the central bank.

The NBG noted that investigations by the relevant agency confirmed none of the sanctioned companies operated in Georgia.

“Three of the 14 virtual asset-related entities sanctioned under the European Union’s 21st package of sanctions against Russia - Aifory LLC, ABCEX LLC, and Rapira Group - are registered in Georgia, but none of them are entities regulated by the National Bank of Georgia. According to the information available to us, following an investigation conducted by the relevant investigative agency into the companies, it was established that none of the sanctioned companies conducted business activities in Georgia. At the same time, additional investigative measures have been launched against them”, the Bank said.

The Bank emphasised that its regulatory framework includes strict market-entry.

“We also note that the regulatory framework of the National Bank of Georgia establishes strict market-entry and operational requirements and serves as an important filter for entities involved in illegal activities”, the statement noted.

The statement further pointed out that Georgia’s rules for virtual asset service providers align with FATF standards and best international practices, as confirmed by the 2024 Moneyval assessment, where Georgia received a “largely compliant” rating for Recommendation 15 - the same as the United Kingdom and France.

“Furthermore, the regulatory framework for virtual asset service providers developed by the National Bank is in line with the standards of the Financial Action Task Force (FATF) and best international practices, as confirmed by the 2024 assessment of the Council of Europe’s Committee of Experts (Moneyval)”, the Bank said.

“According to the assessment, Georgia’s rating with regard to Recommendation 15 - which covers compliance with requirements related to the adoption of new technologies and the regulation of virtual asset service providers (VASPs)- is largely compliant. The United Kingdom and France, for example, have received the same assessment with regard to this recommendation”, the NBG concluded.