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 according to Bybit CEO Ben Zhou, it is not enough to guarantee profitability. Zhou explained that the MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are necessary for a company to be profitable. To offer these products, companies require a MiFID II license and an Electronic Money Institution license. "With the current MiCA framework, you can only do fiat-to-crypto, crypto-to-crypto," Zhou stated. "There are many elements of a profitable business you cannot do, so even as a MiCA holder, unless you're a large entity with multiple licenses, it's challenging to turn a profit." Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe anytime soon, with Zhou estimating a timeline of at least two years. The CEO views the MiCA license as a long-term investment, acknowledging that the company can afford it due to its size. Market consolidation is anticipated, particularly with the MiCA grandfathering period ending soon, which will likely lead to the closure of many smaller crypto firms. "There's going to be market consolidation," Zhou predicted. "That's why these companies are shutting down. Even if they can afford MiCA, they need other licenses to make money and invest in compliance infrastructure to be profitable." The MiCA regulations are also undergoing changes, with some regulators pushing for stricter control and increased oversight. Bybit chose to register with Austria's FMA, a decision Zhou believes will pay off in the long run. He noted that each country interprets MiCA differently, with some prioritizing business attraction and others favoring heavy regulation. Regarding the potential involvement of the European Securities and Markets Authority, Bybit remains neutral, citing both potential advantages and disadvantages.