Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets (MiCA) license is a crucial step for cryptocurrency trading platforms to operate in Europe, but it is not enough to ensure profitability, according to Bybit CEO Ben Zhou. The 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 offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. Currently, Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not profitable in Europe and is at least two years away from breaking even, depending on when it acquires the necessary licenses. Zhou stated that the company can afford to operate at a loss due to its size, but smaller companies may struggle to survive due to the high costs of compliance and licensing. The MiCA grandfathering period is set to end in June, and companies must obtain authorization by July 1 to operate across the region. This deadline is expected to lead to market consolidation, with smaller firms shutting down due to the high costs of compliance. The MiCA framework is also undergoing changes, with some regulators calling for stricter control and increased oversight. Bybit has chosen to work with Austria's FMA, a stringent regulator, 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 (ESMA) in regulating the crypto industry.