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 does not guarantee profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou explained that the MiCA license has limitations, as it only covers fiat-to-crypto and crypto-to-crypto transactions, excluding other essential products like derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, Bybit is not yet profitable in Europe and is at least two years away from breaking even. The company's ability to afford the investment is due to its large size, but smaller entities may struggle to survive. The impending market consolidation is expected to impact small to medium-sized crypto companies, as the MiCA grandfathering period ends in June, and firms must obtain authorization to operate across the region by July 1. Zhou anticipates that this deadline will lead to the closure of many smaller crypto firms, as they are unable to afford the necessary investments in compliance infrastructure. The MiCA framework is also undergoing changes, with some regulators pushing for more centralized control and increased oversight. Bybit has chosen to work with Austria's FMA, a stringent regulator, which Zhou believes will benefit the company in the long run. Regarding the potential involvement of the European Securities and Markets Authority, Zhou expressed neutrality, citing both advantages and disadvantages of a more level playing field.