Bybit CEO Claims MiCA License Alone is Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Bybit CEO Ben Zhou. The current MiCA framework 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 additional licenses, including MiFID II and Electronic Money Institution (EMI) licenses. Zhou explained that even with a MiCA license, companies can only facilitate 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 large entity size to invest in the long term. The company expects to become profitable within two years, depending on when it acquires the necessary licenses. The MiCA license allows crypto-asset service providers to operate across the European Economic Area (EEA), but the grandfathering period is coming to an end, and many small to medium-sized crypto companies are facing a critical juncture. The market is expected to undergo consolidation, with smaller firms shutting down due to the high costs of compliance and the need for additional licenses. Zhou believes that Bybit's decision to choose a stringent regulator in Austria's FMA will pay off in the long run, despite the varying levels of strictness in different countries. The company remains neutral on the potential introduction of the European Securities and Markets Authority (ESMA) as a regulatory body, citing both advantages and disadvantages to a more centralized approach.