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

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but according to Ben Zhou, CEO of Bybit, one of the world's largest cryptocurrency trading platforms, it is not enough to guarantee profitability. 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 a company to be profitable. To overcome these limitations, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou emphasized that even with a MiCA license, companies like Bybit are restricted in their operations, only allowed to facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient for a profitable business. Bybit, despite being 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 status to afford the investment. The timeline for achieving profitability in Europe depends on acquiring the necessary licenses, with Zhou estimating it could take around two years. The crypto market in Europe is on the verge of significant consolidation, particularly with the MiCA grandfathering period set to close at the end of June, which will force many small to medium-sized crypto companies to either obtain MiCA authorization or cease operations. The regulatory landscape is also evolving, with some country regulators pushing for stricter control and increased oversight, which could further impact the profitability of crypto companies in Europe. Zhou noted that Bybit's decision to choose a stringent regulator in Austria's FMA will pay off in the long run, despite the potential for increased bureaucracy with the involvement of the European Securities and Markets Authority.