National Bank Fines Bitexchange GEL 572 Million

The National Bank fined Bitexchange LLC GEL 572,118,000. The company is the one whose executives' statements led to the investigation into Nana Keinishvili, a member of the bank's council. The National Bank announced the fine in its statement of October 9.

The fine was imposed for two types of violations. In the first case, the company twice submitted incorrect information or documentation requested during an inspection. For each such instance the fine is GEL 3,000, so a total of GEL 6,000 was charged for this violation.

The second violation concerns 572,033 cases: the company provided services to customers without fulfilling the identification and verification requirements provided for by law. These requirements imply establishing and checking the identity of the customer. The fine for each case was GEL 1,000, from which GEL 572,033,000 was collected. The total fine for both violations is GEL 572,118,000.

The Prosecutor General's Office announced the launch of an investigation against Keinishvili on October 9. According to the agency, the investigation was launched based on statements by the executives of Bitexchange, which were forwarded from the National Bank. The case is being pursued under Article 337 of the Criminal Code, that is, the unlawful participation of an official or an equivalent person in entrepreneurial activity.

According to the prosecutor's office, based on statements submitted to the National Bank and audio recordings attached to them, Keinishvili is involved in entrepreneurial activity and directly controls a network of companies regulated by the National Bank. The shares of these companies are registered in the name of a member of his family and affiliated persons. According to the same statements, Keinishvili sought to acquire a share in a company regulated by the National Bank and thereby expand his own business.

The Law on Fighting Corruption prohibits public officials from engaging in entrepreneurial activity. The organic law on the National Bank of Georgia, meanwhile, prohibits members of the bank's council and their family members from being partners of a financial sector representative or a legal entity associated with it.

On October 9, the National Bank stated that, by a unanimous decision of the council, Keinishvili has been removed from council sessions until the completion of the prosecutor's investigation.

Radio Liberty said the same day that it had been preparing a journalistic investigation for two months into how Keinishvili sought a stake in a crypto company regulated by the National Bank. The company's owner refused to give up the stake, after which the National Bank fined it GEL 572 million.

According to the investigation, in July 2024 the founders of Bitexchange, Davit Orjonikidze and Nino Kopilashvili, visited Keinishvili's home. With the agreement of the State Security Service, they also had an audio recording device. They recorded how Keinishvili demanded shares, and handed the recording over to the State Security Service. According to Radio Liberty, the agency has not responded so far.