Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for cryptocurrency exchanges operating in Europe, but it is not a guarantee of profitability, according to Bybit CEO Ben Zhou. In a recent interview, Zhou emphasized that a 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 significant revenue. To overcome these limitations, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to offering only fiat-to-crypto and crypto-to-crypto services, which are not enough to ensure profitability. 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 licenses. Zhou views the current MiCA license as a long-term investment, acknowledging that the company can afford it due to its size. However, smaller crypto companies in Europe are facing a critical juncture, as the MiCA grandfathering period is set to end in June, and firms must obtain MiCA authorization to operate across the region by July 1. This deadline is expected to lead to market consolidation, with smaller companies potentially shutting down due to the inability to afford the required licenses and compliance infrastructure. The MiCA framework is also undergoing changes, with some regulators pushing for stricter control and increased oversight. Zhou stated that Bybit chose to work with a stringent regulator in Austria, which will pay off in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process.