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 is not enough to guarantee profitability, as stated by Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. The MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are necessary for a company to be profitable. To offer these products, companies require additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou explained that with the current MiCA framework, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Even large companies like Bybit, which is the world's second-largest cryptocurrency exchange by trading volume, are not expected to break even in Europe anytime soon. The timeline for achieving profitability depends on acquiring the necessary licenses. Zhou stated, 'We don't generate revenue under the current MiCA license, but we can afford it because we're a large entity. For us, it's a long-term investment.' He predicts that it may take around two years for the company to become profitable. The crypto industry in Europe is on the verge of significant changes, particularly with the MiCA grandfathering period coming to an end. By the end of June, small to medium-sized crypto companies must obtain MiCA authorization to operate across the region. This deadline is expected to lead to market consolidation, with many smaller firms shutting down due to the inability to afford the necessary licenses and compliance infrastructure. Zhou noted, 'There's going to be market consolidation. That's why these companies are shutting down. Even if they can afford MiCA, they need other licenses to make money, and they need to invest heavily in compliance infrastructure to be profitable.' The MiCA regulations are also undergoing changes, with some regulators pushing for stricter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, which Zhou believes will pay off in the long run. He remains neutral about the potential involvement of the European Securities and Markets Authority in the regulatory process, citing both potential advantages and disadvantages.