Bybit CEO Claims MiCA License Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license to operate in Europe is a significant step, but it does not guarantee profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou stated that a MiCA license alone is insufficient, as it does not cover the full range of products necessary for profitability, such as derivatives and tokenized assets. To offer these products, companies also need a MiFID II license and an Electronic Money Institution license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, limiting their ability to operate a profitable business. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, depending on when it acquires the necessary licenses. Zhou views the MiCA license as a long-term investment, acknowledging that the company can afford it due to its size. The CEO predicts market consolidation, as smaller crypto companies may struggle to meet the regulatory requirements and obtain the necessary licenses. The MiCA grandfathering period is set to end in June, and firms must obtain MiCA authorization to operate across the region by July 1. Zhou believes that this deadline will lead to the closure of many smaller crypto firms, as they may not be able to afford the investments required to comply with the regulations and obtain the necessary licenses. The MiCA regulations are also undergoing changes, with some regulators calling for tighter control and increased oversight. Zhou stated that Bybit chose to register with Austria's FMA, which he believes will pay off in the long run, despite the regulator's strictness. He also expressed neutrality regarding the potential involvement of the European Securities and Markets Authority in the regulatory process.