Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets (MiCA) 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 generating significant revenue. To overcome these limitations, companies must also acquire a MiFID II license and an Electronic Money Institution (EMI) license. Zhou emphasized that even with a MiCA license, companies like Bybit are restricted to fiat-to-crypto and crypto-to-crypto transactions, which are not enough to sustain a profitable business. The acquisition of additional licenses is crucial for the company's long-term investment and profitability in Europe. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is expected to break even in Europe within two years, depending on the timeline for acquiring the necessary licenses. The current market landscape is undergoing significant changes, with a critical juncture approaching for small to medium-sized crypto companies in Europe as the MiCA grandfathering period comes to a close. This is expected to lead to market consolidation, with many smaller firms shutting down due to the inability to afford the required licenses and compliance infrastructure. The regulatory environment is also evolving, with some country regulators pushing for stricter control and increased oversight. Zhou noted that Bybit chose to work with a stringent regulator in Austria's FMA, which will pay off in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process.