Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but according to Bybit CEO Ben Zhou, it is not enough on its own to generate a profit. In an interview, Zhou explained that the MiCA license has limitations, as it does not cover the full spectrum of products necessary for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies also need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. Zhou noted that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient for a profitable business model. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still at least two years away from breaking even in Europe, according to Zhou. The timeline for achieving profitability depends on when the company acquires the necessary additional licenses. Zhou views the current MiCA license as a long-term investment, stating that the company can afford it due to its size. The CEO predicts that market consolidation is imminent, particularly with the MiCA grandfathering period ending in June, which will likely lead to the closure of many small to medium-sized crypto companies in Europe. Zhou believes that the requirement for multiple licenses, including MiFID and EMI, will be a significant barrier for many companies, leading to market consolidation. The MiCA regulations are also undergoing changes, with some regulators pushing for tighter control and increased oversight. Zhou stated that Bybit chose to register with Austria's FMA, a stringent regulator, which will pay off in the long run. The CEO remains neutral on the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process, citing both potential benefits and drawbacks.