Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing 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. In a recent interview, Zhou emphasized that 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 generating significant revenue. To overcome these limitations, companies need to obtain additional licenses, including a MiFID II (Markets in Financial Instruments Directive) 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 offer a broader range of services and achieve profitability. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe in the near future, with Zhou estimating that it may take around two years to achieve profitability, depending on when the company acquires the necessary licenses. The CEO also predicted that the crypto industry in Europe is on the verge of significant consolidation, as smaller companies struggle to meet the regulatory requirements and obtain the necessary licenses to operate across the region. The MiCA grandfathering period is set to expire at the end of June, and companies that fail to obtain MiCA authorization by July 1 will be unable to operate across the European Economic Area (EEA). Zhou believes that this deadline will lead to a significant reduction in the number of small to medium-sized crypto companies in Europe, as many will be unable to afford the investment required to comply with the regulatory requirements and obtain the necessary licenses. The MiCA regulatory framework is also undergoing changes, with some country regulators pushing for tighter control and increased oversight. Zhou stated that Bybit chose to work with a stringent regulator in Austria's FMA, which will ultimately benefit the company in the long run. The CEO also expressed neutral views on the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process, citing both potential advantages and disadvantages of a more centralized regulatory approach.