Bybit CEO Claims 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 Bybit CEO Ben Zhou. In an interview, 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 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 is not enough to achieve profitability. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe, with Zhou estimating that it may take up to two years to achieve profitability, depending on when the company acquires the necessary licenses. The CEO views the current MiCA license as a long-term investment, acknowledging that the company can afford it due to its size. The European crypto market is on the verge of significant consolidation, particularly with the MiCA grandfathering period set to end in June. This deadline will force many small to medium-sized crypto companies to either obtain MiCA authorization or cease operations. Zhou predicts that this consolidation will lead to the shutdown of many smaller crypto firms, as they will be unable to afford the necessary investments in compliance infrastructure to remain profitable. The MiCA regulatory framework is also undergoing changes, with some regulators pushing for stricter, more centralized control and increased oversight from bodies like the European Securities and Markets Authority. Bybit has chosen to work with Austria's FMA, a stringent regulator, which Zhou believes will pay off in the long run. He also expressed neutrality regarding the potential involvement of ESMA in the regulatory process, citing both potential benefits and drawbacks.