Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets (MiCA) 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. In an interview, Zhou explained that the MiCA license has limitations, as it does not cover the full range of products required for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to acquire 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, 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 large size to afford the investment. Zhou estimated that it may take around two years for the company to become profitable in the region. The CEO also predicted market consolidation, as smaller crypto companies may struggle to obtain the necessary licenses and comply with regulations. The MiCA grandfathering period is set to end in June, and companies must obtain MiCA authorization to operate across the European Economic Area (EEA) by July 1. Zhou believes that this deadline will lead to the closure of many smaller crypto firms. Additionally, MiCA is undergoing changes, with some regulators calling for stricter control and increased oversight. Zhou stated that Bybit chose to register with Austria's FMA, a stringent regulator, which will pay off in the long run. He also expressed neutrality regarding the potential involvement of the European Securities and Markets Authority (ESMA) in the regulation of crypto firms.