Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. Zhou emphasized that the MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are essential for generating revenue. To offer these products, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient for a profitable business. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it awaits the acquisition of the necessary licenses. The timeline for achieving profitability depends on when the company obtains the required licenses. Zhou views the MiCA license as a long-term investment, stating that the company can afford it due to its size. Market consolidation is anticipated, 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 noted that some country regulators are pushing for stricter control and increased oversight, which may impact the crypto industry. Bybit chose to register with Austria's FMA, a regulator known for its stringent requirements, which Zhou believes will pay off in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority in regulating the crypto industry.