Bybit CEO Claims MiCA License Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for cryptocurrency exchanges to operate in Europe, but it is not enough to guarantee profitability, according to Bybit CEO Ben Zhou. In a recent interview, Zhou emphasized that MiCA only covers a limited range of products and services, excluding key areas such as derivatives and tokenized assets. To operate these products, companies need to obtain additional licenses, including 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 are restricted to fiat-to-crypto and crypto-to-crypto transactions, limiting their ability to generate revenue. Bybit, one of the world's largest cryptocurrency trading platforms, is at least two years away from breaking even in Europe, according to Zhou. The company's timeline for profitability depends on its ability to acquire the necessary licenses. The current MiCA framework is limited, and companies need multiple licenses to operate a profitable business, Zhou said. The CEO believes that market consolidation is inevitable, particularly with the MiCA grandfathering period set to end in June. Many small to medium-sized crypto companies may struggle to meet the regulatory requirements, leading to a wave of closures and consolidation in the industry. Zhou also noted that MiCA is undergoing changes, with some regulators pushing for stricter controls and increased oversight. Bybit has chosen to work with Austria's FMA, a stringent regulator, which Zhou believes will pay off in the long run. The CEO remains neutral on the potential involvement of the European Securities and Markets Authority (ESMA) in regulating the crypto industry, citing both potential benefits and drawbacks.