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. 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 profits. To offer these products, companies must also obtain a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and is relying on its size to absorb the costs. The company's profitability timeline in Europe depends on acquiring the necessary licenses, which Zhou estimates could take around two years. The crypto industry in Europe is on the verge of consolidation, with the MiCA grandfathering period set to end in June. This deadline will likely lead to the closure of many small to medium-sized crypto companies that are unable to obtain the required licenses. Zhou predicted that market consolidation is inevitable, citing the high costs and regulatory hurdles that smaller firms face. The MiCA framework is also undergoing changes, with some regulators pushing for stricter controls and increased oversight. Bybit has chosen to work with Austria's FMA, a stringent regulator, 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 the regulatory process, citing both potential benefits and drawbacks.