Bybit CEO: MiCA License Alone 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 Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. Zhou noted 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 a company to be profitable. To offer these products, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution (EMI) license. 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 to afford the investment. Zhou predicted that it could take up to two years for the company to become profitable in the region. The CEO also anticipated market consolidation, as smaller crypto companies may struggle to obtain the necessary licenses and comply with regulatory requirements. The MiCA grandfathering period is set to end in June, and companies must obtain MiCA authorization to operate across the European Economic Area (EEA) by July 1. Zhou believes that this deadline will lead to the closure of many smaller crypto firms, as they will be unable to afford the investments required to comply with the regulations. The MiCA framework is also undergoing changes, with some regulators calling for stricter control and increased oversight. Zhou stated that Bybit chose to register with the Austrian Financial Market Authority (FMA), which has a reputation for being a stringent regulator. He believes that this decision will pay off in the long run, as it will demonstrate the company's commitment to compliance and regulatory adherence.