Bybit CEO Claims MiCA License 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 a guarantee of profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou stated that the MiCA license alone is insufficient, as it does not cover the full range of products required to generate significant revenue, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that the current MiCA framework only allows for fiat-to-crypto and crypto-to-crypto transactions, limiting the potential for profitability. Even large companies like Bybit, the world's second-largest cryptocurrency exchange by trading volume, are not yet breaking even in Europe. Zhou estimates that it may take around two years for Bybit to become profitable in the region, depending on when the company acquires the necessary licenses. The CEO noted that market consolidation is inevitable, particularly with the MiCA grandfathering period coming to an end. This may lead to the closure of many small to medium-sized crypto companies in Europe, as they struggle to meet the regulatory requirements and invest in compliance infrastructure. Zhou also discussed the potential changes to the MiCA framework, including the possibility of increased oversight by the European Securities and Markets Authority (ESMA). Bybit has chosen to work with the Austrian Financial Market Authority (FMA), which Zhou believes will pay off in the long run. The company remains neutral on the issue of ESMA's involvement, citing both potential advantages and disadvantages.