Bybit CEO Highlights Limitations of MiCA License for Profitability in Europe

Acquiring a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is insufficient on its own to generate profits, according to Bybit CEO Ben Zhou. In an interview, Zhou emphasized that the MiCA license only covers a limited range of products and that companies also require a MiFID II license and an Electronic Money Institution (EMI) license to offer derivatives and tokenized assets. This limitation hinders the ability of companies to operate profitably, even for major players like Bybit, which is the world's second-largest cryptocurrency exchange by trading volume. Zhou noted that Bybit is at least two years away from breaking even in Europe, depending on when the company obtains the necessary licenses. The current MiCA framework restricts companies to fiat-to-crypto and crypto-to-crypto transactions, excluding other essential elements of a profitable business. As a result, Bybit views its MiCA license as a long-term investment, with profitability expected within two years. The impending closure of the MiCA grandfathering period at the end of June is expected to lead to market consolidation, with smaller crypto firms facing significant challenges in meeting the regulatory requirements. Zhou predicted that many of these companies will be forced to shut down due to the need for additional licenses and investments in compliance infrastructure. The MiCA regulations are also undergoing changes, with some country regulators advocating for stricter control 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 (ESMA) in the regulatory process, citing concerns about increased bureaucracy and decreased efficiency.