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 it is not enough to guarantee profitability, according to Bybit CEO Ben Zhou. 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 this, companies need to obtain 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 enough to sustain a profitable business. Even Bybit, the world's second-largest cryptocurrency exchange, is not expected to break even in Europe for at least two years, as it awaits the acquisition of necessary licenses. The timeline for profitability depends on obtaining these licenses, with Zhou describing the current investment as a long-term one. 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. The regulatory landscape is also evolving, with some country regulators pushing for stricter control and increased oversight. Zhou noted that Bybit chose to work with a stringent regulator in Austria, which will ultimately benefit the company. The potential involvement of the European Securities and Markets Authority in the regulatory process may lead to a more level playing field, but it also raises concerns about increased bureaucracy and decreased efficiency.