Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring 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 Bybit CEO Ben Zhou. 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 require a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate a profitable business. Even large entities like Bybit, the world's second-largest cryptocurrency exchange by trading volume, are not yet profitable in Europe and are waiting to acquire the necessary licenses. The timeline for breaking even in Europe depends on obtaining these licenses, with Zhou estimating it may take around two years. The CEO also predicted market consolidation, as smaller crypto companies may struggle to meet the regulatory requirements and invest in compliance infrastructure. The MiCA license allows crypto-asset service providers to operate across the European Economic Area (EEA), but the grandfathering period is coming to an end, and companies must obtain MiCA authorization by July 1. This deadline is expected to lead to the closure of many smaller crypto firms. Zhou noted that some country regulators are calling for stricter control and increased oversight, which may impact the profitability of crypto companies. Bybit has chosen to work with a stringent regulator in Austria's FMA, which Zhou believes will pay off in the long run. The company remains neutral about the potential involvement of the European Securities and Markets Authority (ESMA) in the regulation of crypto assets.