Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. In an interview, Zhou emphasized that the MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are essential for generating revenue. To overcome these limitations, companies need to obtain additional licenses, including a MiFID II (Markets in Financial Instruments Directive) license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate 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, pending the acquisition of the necessary licenses. The CEO views this as a long-term investment, acknowledging that the company can afford to wait due to its size. The MiCA license allows crypto-asset service providers to operate across the European Economic Area (EEA), but the grandfathering period is set to end in June, which is expected to lead to market consolidation and the potential demise of smaller crypto firms. Zhou predicted that many small to medium-sized companies will struggle to survive due to the need for additional licenses and compliance infrastructure to operate profitably. The MiCA regulations are also undergoing changes, with some country regulators pushing for stricter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria's FMA, which Zhou believes will pay off in the long run. The CEO remains neutral about the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process, citing both potential benefits and drawbacks.