MiCA License Insufficient for Profitability in Europe, Says Bybit CEO

Acquiring 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 explained that 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 profits. To offer these products, companies require additional licenses, including 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. 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. Zhou estimated that it may take around two years for the company to become profitable in the region, depending on when it acquires the necessary licenses. The CEO also predicted that the European crypto market will experience consolidation, with smaller companies struggling to survive due to the high costs of compliance and licensing. The MiCA grandfathering period is set to end in June, and companies must obtain authorization to operate across the region by July 1. Zhou believes that this deadline will mark the end of many smaller crypto firms, as they will be unable to afford the necessary investments in compliance infrastructure. The MiCA framework is also undergoing changes, with some regulators pushing 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. However, the company remains neutral on the idea of bringing in a more centralized regulator, such as the European Securities and Markets Authority, citing concerns about increased bureaucracy and decreased efficiency.