Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Obtaining 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 MiCA license 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 offer these products, companies need to acquire a MiFID II license and an Electronic Money Institution license. According to Zhou, the current MiCA framework only allows for fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Even large companies like Bybit, which is the world's second-largest cryptocurrency exchange by trading volume, are not yet profitable in Europe and are still in the process of acquiring the necessary licenses. Zhou estimated that it could take up to two years for Bybit to become profitable in Europe, depending on when the company acquires the required licenses. He views the MiCA license as a long-term investment, and the company can afford it due to its size. The MiCA license allows a crypto-asset service provider to operate across the European Economic Area, which includes all 27 members of the European Union, as well as Norway, Iceland, and Liechtenstein. The grandfathering period for MiCA is set to end in June, and companies must obtain MiCA authorization to operate across the region by July 1. This deadline is expected to lead to market consolidation, with many small to medium-sized crypto companies shutting down due to the inability to afford the required licenses and compliance infrastructure. Zhou predicted that there will be market consolidation, and many smaller crypto firms will shut down because they cannot afford the necessary licenses and compliance infrastructure. He also noted that MiCA is undergoing changes, with some country regulators calling for tighter control and increased oversight. Bybit chose to register with the Austrian FMA, which Zhou believes will pay off in the long run. He stated that each country interprets MiCA differently, with some countries being more lenient and others being stricter. Regarding the potential involvement of the European Securities and Markets Authority, Zhou said that Bybit is neutral, as it could bring about a more level playing field but also increase bureaucracy and decrease efficiency.