Bybit CEO: MiCA License Alone 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 enough on its own to generate a profit, according to Bybit CEO Ben Zhou. In an interview, Zhou explained that the MiCA license does not cover the full range of products necessary for profitability, such as derivatives and tokenized assets, which require additional licenses like MiFID II and Electronic Money Institution (EMI). Zhou noted that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, limiting their ability to operate a profitable business. He emphasized that having multiple licenses is essential for success, citing companies like Kraken, Bitpanda, and Bitvivo as examples. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe, with Zhou estimating that it may take around two years to achieve profitability, depending on when the company acquires the necessary licenses. The CEO views the current MiCA license as a long-term investment, acknowledging that the company can afford it due to its size. However, he warned that smaller crypto companies in Europe are facing a critical juncture, as the MiCA grandfathering period is set to close at the end of June, and firms must obtain MiCA authorization to operate across the region by July 1. Zhou predicted that this deadline will lead to market consolidation, as smaller companies may struggle to afford the necessary investments in compliance infrastructure to become profitable. He also noted that MiCA is undergoing changes, with some regulators pushing for tighter control and increased oversight, which may impact the crypto industry. Bybit chose to work with Austria's FMA, a stringent regulator, which Zhou believes will pay off in the long run. He emphasized that each country interprets MiCA differently, resulting in varying levels of strictness. Regarding the potential involvement of the European Securities and Markets Authority (ESMA), Zhou stated that Bybit remains neutral, citing both potential advantages and disadvantages of a more centralized regulatory approach.