The National Bank of Georgia (NBG) once again addresses the issue of the possible unlawful involvement of NBG Board Member Nana Keinishvili in entrepreneurial activities and categorically dissociates itself from such conduct. In view of the NBG’s high standards of institutional reputation, the Board unanimously decided to exclude Nana Keinishvili from participating in the work of the NBG Board until the investigation is completed and the objective truth is established.

We also emphasize that Nana Keinishvili acted alone, as evidenced by an audio recording made by a company representative, in which she speaks about her own plans and objectives. Furthermore, the supervision of virtual asset service providers was not within Nana Keinishvili’s area of responsibility at the National Bank of Georgia (NBG) and, consequently, she could not have influenced the decision-making process in any way. Inspections of entities subject to NBG supervision are strictly confidential. Information relating to such inspections is accessible exclusively to the relevant team and is not available to any other person, including members of the NBG Board. We further clarify that Nana Keinishvili was a non-executive member of the NBG Board and, accordingly, was not involved in day-to-day executive management and had no operational management mandate.

As for the fine imposed by the NBG on the virtual asset service provider Bitexchange LLC, the inspection in question was conducted as planned in February 2026. Accordingly, the statement by the representative of Bitexchange LLC that the fine was related to information he provided to the NBG is unfounded and is intended to deliberately mislead the public.

In view of the high level of public interest, we inform the public that Bitexchange LLC was fined for violating the rules on the prevention of money laundering and the financing of terrorism, as well as for numerous other violations.

Below, we provide a detailed explanation of the circumstances and grounds for imposing the fine on Bitexchange LLC.

1. Gross Violations of Legislation on the Prevention of Money Laundering and the Financing of Terrorism

The National Bank of Georgia inspected Bitexchange LLC (identification number: 404595121) to assess its compliance with legislative requirements for the prevention of money laundering and the financing of terrorism (AML/CFT). For the violations identified during the inspection, the company was fined a total of GEL 572,118,000, while each of the company’s two administrators was additionally fined GEL 7,000.

The largest portion of the fine imposed on the company (GEL 572,033,000) relates to violations of customer identification and verification requirements. Specifically, the company conducted transactions through self-service kiosks without identifying customers and verifying their identities in accordance with the procedures prescribed by law. It should be emphasized that customer identification and verification are mandatory for every transaction, regardless of the amount involved. Furthermore, customer verification through self-service kiosks must be conducted in accordance with a process agreed upon with the National Bank of Georgia, which the company failed to ensure.

The identified violations concerned one of the most fundamental requirements of the AML/CFT framework: the provision of services to a person, including a person acting on behalf of a client, without fulfilling the identification and verification requirements prescribed by law. Compliance with these requirements is an essential prerequisite for preventive measures and is critical to the proper assessment and management of risks associated with both the client and the organization’s activities.

Furthermore, under the Rule on Determining, Imposing, and Enforcing Pecuniary Penalties on Virtual Asset Service Providers and Their Administrators, providing services to a person, including a person acting on behalf of a client, without meeting the legally prescribed identification and verification requirements is classified as a serious violation. This classification reflects the particular importance attached to these requirements. Failure to comply with them is not merely a formal or procedural deficiency, as it significantly impairs the ability to establish a client’s identity, assess associated risks, monitor transactions, and detect suspicious and unusual transactions.

The amount of the financial penalty imposed in this case was determined by the fundamental nature of the violated requirements, their importance for the effective functioning of the AML/CFT framework, and the severity and scale of the violations identified. Accordingly, the sanction must be assessed not only in monetary terms but also in light of the nature of the obligations breached and the totality of the factual circumstances established during the inspection.

2. Suspicious Transactions Related to Prohibited and Illegal Activities

During the inspection, an examination of the information provided by the company and the transactions conducted through self-service kiosks revealed that publicly available sources, including information accessible through Google searches, contained references suggesting a possible connection between one of the most frequently used virtual asset receiving addresses and the suspected sale of various prohibited substances through a Telegram channel or group associated with that address. Furthermore, given the frequency, similar characteristics, and volume of the transactions, transactions of a similar nature were also identified at other virtual asset addresses.

3. Deficiencies in the Company’s Electronic Data Recording and Processing Systems

In addition to deficiencies in customer identification and verification, the inspection revealed significant shortcomings in the company’s electronic data recording and processing systems.

Under the applicable legislation, transactions carried out by a virtual asset service provider must be fully recorded, systematized, and stored in its systems in such a way that every action performed on the recorded information can be logged and, where necessary, the relevant information can be retrieved and extracted from the virtual asset service provider’s head office within the shortest possible time.

Significant deficiencies were also identified in both the systems used to screen sanctioned persons and politically exposed persons (PEPs), which meant that proper customer screening could not be confirmed, and the systems used to detect suspicious and unusual transactions. Specifically, the existing deficiencies hindered the detection of high-risk transactions, including linked transactions conducted across different blockchains and connections between virtual asset wallets.

In addition, the company failed to submit reports to the Financial Monitoring Service on two suspicious transactions, despite the presence of various indicators of suspicious activity. It should be noted that, under the applicable penalty rules, failure to submit a suspicious transaction report to the Financial Monitoring Service and deficiencies in software and electronic systems are classified as particularly serious violations.

4. Submission of Incorrect and Incomplete Information to the NBG

Furthermore, during the inspection, the company submitted incorrect and incomplete information to the National Bank of Georgia. Discrepancies in the data provided and the need to request information repeatedly impeded the inspection process.

The inspection also failed to establish that the company’s software systems, staffing, and internal control mechanisms were commensurate with the scale of its operations, the volume of its transactions, and the risks inherent in the virtual asset sector.

The National Bank of Georgia also wishes to inform the public that, within the scope of its mandate, it supervises financial institutions, including virtual asset service providers, with regard to the prevention of money laundering and the financing of terrorism. This supervision is conducted using a risk-based approach, in accordance with Georgian legislation and the Supervisory Framework for Combating Money Laundering and the Financing of Terrorism of the National Bank of Georgia, approved by Decree No. 297/04 of the Governor of the National Bank of Georgia dated December 31, 2018.

In accordance with the standards of the Financial Action Task Force (FATF) and the organic legislation of Georgia, AML/CFT supervision is conducted using a risk-based approach. This approach entails, on the one hand, focusing supervisory attention on entities and activities that present elevated risks and, on the other, making effective use of available supervisory resources.

Taking these principles and international best practices into account, the National Bank of Georgia conducts both planned supervisory inspections and unscheduled (so-called ad hoc) inspections when relevant risks or circumstances are identified. Within this framework, on-site inspections of several virtual asset service providers are currently underway.

In 2026 alone, the National Bank of Georgia inspected a total of 51 supervised entities, including Bitexchange LLC, a virtual asset service provider. Inspections of other supervised entities are also underway but have not yet been completed and, accordingly, are not reflected in these statistics.

Following the completion of inspections, monetary penalties were imposed on the vast majority of entities in accordance with the violations identified. This reflects the National Bank of Georgia’s consistent supervisory approach to ensuring compliance with statutory requirements for the prevention of money laundering and the financing of terrorism.