Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Acquiring 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 revenue. To overcome these limitations, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate a profitable business. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it awaits the acquisition of the necessary licenses. The CEO views the MiCA license as a long-term investment, acknowledging that market consolidation is imminent, particularly with the MiCA grandfathering period set to close at the end of June. This deadline is expected to have a significant impact on small to medium-sized crypto companies in Europe, as they must obtain MiCA authorization to operate across the region by July 1. Zhou predicts that many smaller crypto firms will be forced to shut down due to the inability to afford the necessary investments in compliance infrastructure. The MiCA regulations are also undergoing changes, with some country regulators advocating 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 CEO remains neutral about the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process, citing both potential advantages and disadvantages.