Bybit CEO Claims MiCA License Insufficient for European Profitability

Securing a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Bybit CEO Ben Zhou. 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 explained that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Bybit, the second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and is investing in the long term. The company expects to become profitable within two years, depending on when it acquires the necessary licenses. The European crypto market is on the verge of consolidation, with smaller companies facing significant challenges in obtaining the required licenses and complying with regulatory requirements. The MiCA grandfathering period is set to end in June, and companies must obtain MiCA authorization to operate across the region by July 1. Zhou believes that market consolidation is inevitable, and many smaller crypto firms will be forced to shut down due to the high costs of compliance and the need for multiple licenses. The MiCA framework is also undergoing changes, with some regulators calling for stricter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, which Zhou believes will pay off in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process.