Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license is a crucial step for operating in Europe, but according to Bybit CEO Ben Zhou, it is merely the first hurdle in achieving profitability. The MiCA framework has limitations, as it does not encompass the full range of products necessary for a company to turn a profit, such as derivatives and tokenized assets. To offer these products, companies must also obtain a MiFID II license and an Electronic Money Institution license. Zhou emphasized that even with a MiCA license, a company can only facilitate fiat-to-crypto and crypto-to-crypto transactions, leaving out many essential elements of a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and is relying on its size to sustain the investment. The company's timeline for profitability depends on acquiring the necessary licenses, with Zhou estimating it could take around two years. The crypto market in Europe is on the cusp of significant consolidation, particularly with the MiCA grandfathering period set to expire, which will likely lead to the demise of many smaller crypto firms. Regulators are also calling for stricter control, with the European Securities and Markets Authority potentially being granted increased oversight. Bybit has chosen to work with Austria's FMA, a stringent regulator, in anticipation of long-term benefits. The company remains neutral on the potential introduction of ESMA into the regulatory mix, citing both the benefits of a level playing field and the potential drawbacks of increased bureaucracy.