MiCA License Alone Insufficient for Profitability in Europe, Says Bybit CEO

Obtaining a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not enough on its own to generate profits, according to Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. In an interview, Zhou emphasized that MiCA does not cover the full range of products required for profitability, such as derivatives and tokenized assets, which necessitate a MiFID II (Markets in Financial Instruments Directive) license and an Electronic Money Institution (EMI) license. Zhou noted that even with a MiCA license, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, limiting their ability to operate a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still a ways off from breaking even in Europe, with Zhou estimating that it could take around two years to achieve profitability, contingent upon acquiring the necessary licenses. The CEO views the current MiCA framework as a long-term investment, acknowledging that smaller crypto companies may struggle to adapt. With the MiCA grandfathering period set to close at the end of June, market consolidation is expected, and smaller firms may be forced to shut down due to the inability to afford the required licenses and compliance infrastructure. Zhou also discussed the potential for tighter regulation and increased oversight, highlighting the importance of choosing a stringent regulator, such as Austria's FMA, to ensure compliance and avoid potential pitfalls.