Bybit CEO: 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. 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 (EMI) license. According to Zhou, the current MiCA framework only allows for fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient to sustain a profitable business. Even large entities like Bybit, the world's second-largest cryptocurrency exchange by trading volume, are not yet profitable in Europe and are still in the process of acquiring the necessary licenses. Zhou predicts that market consolidation is imminent, particularly with the MiCA grandfathering period coming to a close at the end of June. This deadline will likely lead to the shutdown of many small to medium-sized crypto companies in Europe, as they will be required to obtain MiCA authorization to operate across the region by July 1. The MiCA license is subject to interpretation by each country, with some countries having stricter regulations than others. Bybit has chosen to work with Austria's FMA, a stringent regulator, which Zhou believes will pay off in the long run. Regarding the potential involvement of the European Securities and Markets Authority (ESMA) in regulating the crypto industry, Zhou remains neutral, citing both the potential benefits of a level playing field and the drawbacks of increased bureaucracy.