Bybit CEO: MiCA License Alone is Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. In an interview, Zhou emphasized that the MiCA license has limitations, as it does not cover the full range of products required to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to acquire a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and is relying on its size to absorb the costs. The company's profitability timeline in Europe depends on acquiring the necessary licenses, which Zhou estimates could take around two years. The CEO also predicted market consolidation, as smaller crypto companies may struggle to meet the regulatory requirements and invest in compliance infrastructure. The MiCA license allows crypto-asset service providers to operate across the European Economic Area, but the grandfathering period is set to end, and companies must obtain MiCA authorization by July 1. Zhou believes that this deadline will lead to market consolidation, as smaller firms may be forced to shut down due to the regulatory hurdles. The MiCA framework is also undergoing changes, with some regulators calling for stricter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, 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 in the regulatory process.