Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Securing 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. In an interview, Zhou explained that the MiCA license has limitations, as it does not cover the full range of products required for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. He cited examples of companies like Kraken, Bitpanda, and Bitvivo, which have multiple licenses and are already generating revenue. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe. Zhou attributed this to the need for additional licenses, which will take time to acquire. He described the current MiCA license as a long-term investment for the company, stating that it may take up to two years for Bybit to become profitable in Europe. The crypto industry in Europe is on the verge of significant consolidation, particularly with the impending closure of the MiCA grandfathering period at the end of June. This means that crypto-asset service providers must obtain MiCA authorization to operate across the region by July 1, which is expected to lead to the demise of many smaller crypto firms. Zhou predicted that market consolidation is inevitable, as smaller companies may struggle to afford the necessary licenses and compliance infrastructure to remain profitable. He also noted that MiCA itself is undergoing changes, with some regulators pushing for tighter control and increased oversight. Bybit chose to register with Austria's FMA, a decision that Zhou believes will pay off in the long run. He highlighted the differences in how each country interprets MiCA, with some opting for stricter regulations and others seeking to attract new business. Regarding the potential involvement of the European Securities and Markets Authority (ESMA) in regulating the crypto industry, Zhou expressed a neutral stance. While a more level playing field could be beneficial, he also noted that it could lead to increased bureaucracy and decreased efficiency.