Bybit CEO: MiCA License Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets (MiCA) license is a significant milestone for cryptocurrency trading platforms seeking to operate in Europe, but it is not a guarantee of success, according to Ben Zhou, CEO of Bybit. Zhou emphasized that the MiCA license has limitations, as it does not cover a wide range of products, including 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 the MiFID II (Markets in Financial Instruments Directive) license and an Electronic Money Institution (EMI) license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to offering only fiat-to-crypto and crypto-to-crypto services, which are not enough to generate significant revenue. As a result, Bybit is at least two years away from breaking even in Europe, with the timeline dependent on the acquisition of necessary licenses. Zhou predicted that market consolidation is inevitable, particularly with the MiCA grandfathering period ending in June, which will force many small to medium-sized crypto companies to either obtain the necessary licenses or cease operations. The CEO also mentioned that MiCA is undergoing changes, with some regulators pushing for stricter control and increased oversight, which may impact the profitability of crypto firms. Bybit has chosen to work with a stringent regulator in Austria's FMA, which Zhou believes will have long-term benefits. Regarding the potential involvement of the European Securities and Markets Authority (ESMA), Zhou expressed neutrality, citing both the benefits of a level playing field and the potential drawbacks of increased bureaucracy and decreased efficiency.