Bybit CEO Claims MiCA License Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough on its own to guarantee profitability, according to Bybit CEO Ben Zhou. The MiCA license has limitations, as it does not cover a wide range of products like derivatives and tokenized assets that are essential for a company to be profitable. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions. Many elements necessary for a profitable business, such as offering derivatives, cannot be done with a MiCA license alone. Even large companies like Bybit, the second-largest cryptocurrency exchange by trading volume, are not yet profitable in Europe and are still in the process of acquiring the necessary licenses. The timeline for breaking even in Europe depends on when these licenses are obtained, with Zhou estimating it may take around two years. The expiration of the MiCA grandfathering period at the end of June is expected to lead to market consolidation, as smaller companies may struggle to meet the regulatory requirements and obtain the necessary licenses. The regulatory landscape is also evolving, with some countries 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. The company remains neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process.