Bybit CEO Claims MiCA License Alone is Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, says Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. The MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are necessary 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 engage in fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain 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, depending on when the company acquires the necessary licenses. Zhou considers this a long-term investment for the company. The MiCA license allows a crypto-asset service provider to operate across the European Economic Area, but the grandfathering period is coming to an end, which is expected to lead to market consolidation and the closure of many small to medium-sized crypto companies. Zhou predicts that there will be market consolidation, as smaller firms may not be able to afford the necessary licenses and compliance infrastructure to remain profitable. The MiCA regulations are also undergoing changes, with some regulators calling for tighter control and increased oversight. Bybit has chosen to register with the Austrian FMA, which Zhou believes will pay off in the long run due to the regulator's stringent standards.