Bybit CEO: MiCA License Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, as stated by 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 require a MiFID II license and an Electronic Money Institution license. As Zhou explained, "With the current MiCA framework, you can only do fiat-to-crypto, crypto-to-crypto. There are many elements of a profitable business you cannot do, so even as a MiCA holder — unless you're Kraken or Bitpanda or Bitvivo, who are already making money because they have multiple licenses." Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe, according to Zhou. The timeline for achieving profitability depends on when the company acquires the necessary licenses. "We don't make money under the current MiCA license. But we're able to afford it because we're a big entity. For us, it's a long-term investment," Zhou said. "It could be five years away, but I think that is a bit long. I would assume we are probably going to be profitable within two years." The crypto market in Europe is on the verge of consolidation, as the MiCA grandfathering period is set to end in June. This means that crypto-asset service providers must obtain MiCA authorization to operate across the region by July 1. "There's going to be market consolidation," Zhou said. "That's why these guys are shutting down. Because even if they know they could afford MiCA, they're like, 'I need [MiFID, EMI] to make money, and I need to make a whole lot of investment in compliance infrastructure to be able to be profitable?'" The MiCA regulations are undergoing changes, with some country regulators pushing for stricter control and increased oversight. The European Securities and Markets Authority recently reminded crypto firms that some structured products may fall outside the rules. Zhou stated that Bybit chose to register with Austria's FMA, a stringent regulator, which will pay off in the long run. Each country has a different interpretation of MiCA, resulting in varying levels of strictness. Regarding the potential involvement of ESMA, Bybit remains neutral, according to Zhou. "There are talks about a more level playing field," he said. "But there could be disadvantages. Because when you have a local regulator, they are easy to get to. If we have any issues, we just send an email and go to FMA in Vienna. But if everyone's in Paris, then you have to line up. There are more CASPs, increased bureaucracy, decreased efficiency."