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, according to Bybit CEO Ben Zhou. 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 a company to be profitable. To offer these products, companies need to acquire a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions. He stated that even with a MiCA license, companies cannot engage in many aspects of a profitable business, unless they have multiple licenses like some of the larger companies. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe. The timeline for breaking even depends on when the company acquires the necessary licenses. Zhou considers this a long-term investment, estimating that it may take around two years for the company to become profitable. The crypto market in Europe is on the verge of consolidation, particularly with the MiCA grandfathering period ending in June. This means that crypto-asset service providers must obtain MiCA authorization by July 1 to operate across the region. This deadline is expected to lead to the closure of many smaller crypto companies. Zhou predicts that there will be market consolidation, as smaller companies may struggle to afford the necessary licenses and comply with regulatory requirements. The MiCA regulations are also undergoing changes, with some regulators calling for more centralized control and increased oversight. Bybit chose to register with Austria's FMA, a decision that Zhou believes will pay off in the long run. He noted that each country has different interpretations of the MiCA regulations, resulting in varying levels of strictness. Regarding the potential involvement of the European Securities and Markets Authority (ESMA), Zhou remains neutral, citing both advantages and disadvantages of a more level playing field.