Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but it does not guarantee profitability, according to Bybit CEO Ben Zhou. The MiCA license has limitations, as it does not cover derivatives and tokenized assets, which are essential for a company to be profitable. To overcome these limitations, companies need to obtain additional licenses, such as MiFID II and Electronic Money Institution licenses. Even Bybit, the second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it depends on acquiring the necessary licenses. The current MiCA framework only allows for fiat-to-crypto and crypto-to-crypto transactions, which restricts the potential for profitability. Market consolidation is expected, with smaller crypto companies facing significant challenges in meeting the regulatory requirements. The MiCA grandfathering period is set to end, and companies must obtain the necessary authorization to operate across the region by July 1. This deadline is likely to lead to the closure of many smaller crypto firms, as they struggle to meet the compliance infrastructure requirements. The regulatory landscape is evolving, with some country regulators pushing for stricter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, which is expected to pay dividends in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process.