The monetary fine of 572 118 000 (Five hundred seventy-two million one hundred eighteen thousand) GEL was imposed on the Virtual Asset Service Provider “BITEXCHANGE” LLC (I.N. 404595121).
•    In two (2) cases, the Provider submitted incorrect information/documentation requested during the inspection process. Pursuant to subparagraph “n” of paragraph 3 of Article 2 of the “Rule on Determining, Imposing and Enforcing Monetary Penalties on Virtual Asset Service Providers and Their Administrators,” approved by Order No. 133/04 of the President of the National Bank of Georgia dated 29 May 2024 (as in effect until 24 August 2026; hereinafter – the “Penalty Rule”), a monetary penalty of GEL 3,000 (three thousand) is prescribed for each instance of late or incorrect submission of information/documentation stipulated under each clause of the agreement. The total amount of the penalty imposed is GEL 6,000 (six thousand).
•    In five hundred seventy-two thousand thirty-three (572,033) cases, the Provider violated the requirements of subparagraph “a” of paragraph 1 of Article 10 of the Law of Georgia on Facilitating the Prevention of Money Laundering and the Financing of Terrorism. Specifically, services were provided to persons (including persons acting on behalf of clients) without complying with the identification/verification requirements established by legislation. Pursuant to subparagraph “b” of paragraph 3 of Article 2 of the Penalty Rule, each such violation entails a monetary penalty of GEL 1,000 (one thousand). The total amount of the penalty imposed is GEL 572,033,000 (five hundred seventy-two million thirty-three thousand).
•    In two (2) cases, the Provider violated the requirement to submit information on suspicious transactions established under paragraph 3 of Article 3 of the “Rule on Record-keeping, Storage and Reporting of the Information on the Transaction by Obliged Entity to the Financial Monitoring Service of Georgia,” approved by Order No. 1 of the Head of the Financial Monitoring Service of Georgia dated 5 June 2020. Pursuant to subparagraph “p” of paragraph 2 of Article 2 of the Penalty Rule, each such violation entails a monetary penalty of GEL 7,000 (seven thousand). The total amount of the penalty imposed is GEL 14,000 (fourteen thousand).
•    During the inspection, it was revealed that the Provider violated the requirements of paragraph 5 of Article 7 of the “Rule for the Virtual Asset Service Provider’s (VASP’s) registration at the National Bank of Georgia, registration cancellation, and regulation,” approved by Order No. 94/04 of the President of the National Bank of Georgia dated 13 June 2023. Specifically, the Provider failed to ensure that the operations performed by it were fully recorded, systematized and stored in its system in such a way that any actions taken in relation to them were logged and, where necessary, information about them could be found and retrieved from the Provider’s head office in the shortest possible time. Pursuant to subparagraph “s” of paragraph 2 of Article 2 of the Penalty Rule, this violation entails a monetary penalty of GEL 20,000 (twenty thousand).
•    During the inspection, it was revealed that the software (electronic) system intended to ensure automatic screening of persons/virtual asset addresses against lists of politically exposed persons, persons subject to sanctions under UN Security Council Resolutions, the “Rule on Compliance with Sanctions Regimes by Accountable Persons under the Supervision of the National Bank of Georgia,” approved by Order No. 208/04 of the President of the National Bank of Georgia dated 4 August 2023 (hereinafter – the “Sanctions Compliance Rule”), and/or other sanctions regimes prescribed by the National Bank through written instructions, was operating with significant deficiencies. Pursuant to subparagraph “e” of paragraph 2 of Article 2 of the Penalty Rule, such a violation entails a monetary penalty of GEL 15,000 (fifteen thousand).
•    During the inspection, it was revealed that the software (electronic) system intended to ensure the automatic detection of noteworthy/unusual transactions through the processing of information based on distributed ledger technology (DLT), for the purposes of facilitating the prevention of money laundering and the financing of terrorism, was operating with significant deficiencies. Pursuant to subparagraph “v” of paragraph 2 of Article 2 of the Penalty Rule, such a violation entails a monetary penalty of GEL 20,000 (twenty thousand).
•    During the inspection process, the Provider obstructed the inspection team, which caused delays in its completion. Specifically, the provision of incorrect, inaccurate and incomplete information reflected in the inspection act resulted in an extension of the inspection period and hindered the selection of clients for review and the analysis of their transactions. Pursuant to subparagraph “i” of paragraph 2 of Article 2 of the Penalty Rule, such obstruction entails a monetary penalty of GEL 10,000 (ten thousand).