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 according to Bybit CEO Ben Zhou, it is not enough to guarantee profitability. 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 must also obtain a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to fiat-to-crypto and crypto-to-crypto transactions, limiting their ability to generate revenue. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still some way off from breaking even in Europe, with Zhou estimating that it could take up to two years to achieve profitability. The company's ability to afford the costs associated with the MiCA license is due to its size, but smaller companies may struggle to survive. The impending closure of the MiCA grandfathering period at the end of June is expected to lead to market consolidation, as smaller companies may be forced to shut down due to the costs and regulatory requirements associated with obtaining the necessary licenses. Zhou believes that the regulatory landscape in Europe is undergoing significant changes, with some country regulators pushing for stricter controls and increased oversight. Bybit has chosen to work with the Austrian regulator, FMA, which Zhou believes will pay dividends in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process, citing concerns about increased bureaucracy and decreased efficiency.