Georgia’s Path in Crypto Regulation: A Conversation with Dito Khvichia

Q: Could you tell us about yourself and explain why you started working with cryptocurrencies and blockchain technologies?

As a Managing partner of Justice League, a law firm focused on business law, regulatory compliance, and cross-border legal matters. My involvement with blockchain and cryptocurrencies began through my legal practice. As Georgia started attracting international entrepreneurs and fintech companies, we increasingly encountered projects related to digital assets, exchanges, and blockchain infrastructure. It became clear that this emerging sector required careful legal structuring and regulatory analysis. For a lawyer working at the intersection of technology and regulation, it was a natural evolution to become involved in the crypto space.

Q: Which aspects of this field interest you most today: technology, investment, regulation, fintech infrastructure, or something else?

What interests me most is the interaction between technological innovation and regulatory frameworks. Blockchain technology is transforming financial infrastructure, but innovation alone cannot sustain an ecosystem without legal certainty. My focus is therefore on how regulation can support innovation while maintaining transparency, compliance, and investor protection. Regulations are almost always behind technological developments, so keeping up with new challenges makes our work both more demanding and more interesting.

Q: How would you assess the current state of the crypto market in Georgia? Is it still in a formative stage, or has it already become a mature ecosystem?

Georgia is still in a formative but promising stage of course. The country already has mining operations, exchanges, and fintech service providers, but the broader startup ecosystem around Web3 remains relatively small. At the same time, the foundations are there: a supportive business environment, immense technological talent, and increasing regulatory attention to the sector.

Q: What factors have made Georgia visible on the regional crypto map?

Georgia’s visibility comes from several factors. Historically, the country offered a relatively flexible regulatory environment, competitive tax policies such as International Company and Innovative startup statuses and a reputation for openness toward technological innovation. In addition, Georgia’s geographic position between Europe and Asia has made it an attractive operational hub for companies looking to serve multiple markets. In the yearly years of crypto adoption, Georgia served as important hub for crypt mining, maintaining the spot in the top hash-rate contributors. In 2016, Georgian government partnered with a blockchain development firm to record the part of the public registry information on the blockchain.

Q: Is there a strong Web3 and blockchain startup community in Georgia?

There is a growing community of developers and entrepreneurs interested in blockchain technologies, although the ecosystem is still developing. Compared to larger global hubs, Georgia’s Web3 start-up scene is smaller, but the potential is significant if access to capital and regulatory clarity continue to improve. Enthusiastic professionals are actively establishing associations, organizing summits and meetups to share their experience and discuss emerging challenges. There are already associations representing IT companies, as well as organizations focused on AI and e-commerce, which actively collaborate with both the private sector and regulatory institutions.

Q: How do you evaluate the current regulatory framework in Georgia regarding crypto-assets?

In recent years Georgia has made meaningful progress in establishing regulatory oversight of the crypto sector. The introduction of registration requirements for Virtual Asset Service Providers (VASPs) and stronger AML compliance obligations demonstrates that regulators are taking the sector seriously. For example, The recent rules for implementing an online onboarding process, which impose additional obligations on VASPs, are already in force, and several other regulations are currently under development. After the initial efforts to regulate virtual assets, Georgia introduced stricter requirements, such as capital requirements, prudential obligations, consumer protection and funds segregation. New requirements are planned to take effect in the last quarter of 2026.

Q: To what extent is the Georgian regulatory model aligned with the European approach, for example with the Markets in Crypto-Assets Regulation (MiCA)?

Georgia is gradually aligning with European regulatory standards, particularly in areas such as financial supervision and anti-money laundering requirements. While the country has not implemented a regulatory regime identical to MiCA, we can observe a clear trend toward harmonization with European financial regulations. Georgia doesn’t plan to copy the European feramework, however, planned changes closely follow the spirit of the MiCA regulation.

Q: What are the main legal gaps or unresolved issues in the circulation of crypto-assets today?

One of the main challenges is the lack of detailed legal guidance on token classification and token issuance. Questions related to investor protection, securities classification, and cross-border regulatory treatment of digital assets still require further clarification. At the same time, there are major caps between the civil legislation and needs of the digital asset industry regulation.

Q: How effectively are AML/CFT mechanisms implemented in Georgia with respect to the crypto sector?

Georgia has significantly strengthened its AML and compliance requirements for crypto service providers. Registered VASP must implement KYC procedures, transaction monitoring, and internal compliance systems. These documents are thoroughly examined by the National Bank of Georgia during the VASP registration process. Professionals with extensive AML experience in the banking and financial sectors are able to navigate AML/CFT procedures more effectively. All these measures are increasingly aligned with international standards.

Q: How do Georgian banks approach crypto projects and crypto businesses? Are there practical difficulties in opening and maintaining bank accounts?

Banking access remains one of the most practical challenges for crypto businesses worldwide, and Georgia is no exception. Several years ago, when we contacted all registered banks regarding the possibility of opening accounts for crypto companies, only one responded positively. Banks tend to approach crypto-related businesses cautiously due to compliance and regulatory risks. While opening bank accounts is possible, companies must demonstrate strong governance, transparency, and robust compliance procedures. At the same time, we are now seeing signs of change, as some of the largest banks in Georgia are beginning to explore projects involving crypto-assets, recognizing the growing importance of this market.

Q: Can Georgia be considered an attractive jurisdiction for crypto entrepreneurs compared to other countries in the region?

Georgia remains an attractive jurisdiction in several respects: relatively straightforward company formation procedures, a competitive tax environment, and a strategic geographic position. For many entrepreneurs looking to operate in the region, it can serve as a practical operational base. I would also add that, in my experience, communication with regulators is generally constructive and solution-oriented, with authorities often seeking to help businesses navigate procedures rather than simply rejecting applications.

Q: Are there examples of successful tokenization of businesses or infrastructure projects in Georgia?

Tokenization initiatives have appeared in experimental and pilot formats, although large-scale projects are still limited. As legal frameworks become clearer and investor confidence grows, we may see more practical applications of tokenization in the coming years. Currently, the national bank of Georgia, hosts the tokenization sandbox for financial instrument tokenization. The ministry of Justice of Georgia expressed interest in tokenizing immovable assets.

Q: What key risks do you foresee for the Georgian crypto market over the next three to five years?

The main risks relate to regulatory uncertainty, banking access, and the pace of global regulatory developments. Smaller jurisdictions must constantly adapt to international standards, which can create both opportunities and challenges for local markets. The global trend shows that the crypto industry is becoming increasingly regulated. If this trend directly affects Georgia, it could impose a significant financial burden on crypto companies, particularly smaller ones, which may struggle to comply with stricter requirements. As a result, smaller market participants could gradually disappear, leaving more space for larger institutional players.

Q: Could tightening global regulation in the EU or the United States affect Georgia’s position as a potential crypto hub?

Absolutely. The crypto sector is global by nature, and regulatory developments in major markets inevitably influence smaller jurisdictions. If global standards become stricter, Georgia will likely continue aligning its regulatory framework with international practices.

Q: Finally, what advice would you give to lawyers and other professionals who are considering entering this field?

I would encourage them to approach this field with both intellectual curiosity and professional discipline. Blockchain technology is fascinating, but crypto law ultimately sits at the intersection of finance, regulation, and international business. Lawyers entering this space must understand not only the technology but also the broader financial and regulatory environment in which it operates.