Bybit CEO Claims 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 Bybit CEO Ben Zhou. In an interview, Zhou emphasized that the MiCA license has limitations, as it does not cover the full range of products required to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II 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 sufficient to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still some way off from breaking even in Europe, with Zhou estimating that it could take up to two years to achieve profitability. The timeline depends on when the firm acquires the necessary licenses. The current MiCA framework is undergoing changes, with some regulators pushing for stricter control and increased oversight. Zhou expressed concerns that the introduction of a more centralized regulatory body, such as the European Securities and Markets Authority (ESMA), could lead to increased bureaucracy and decreased efficiency. The MiCA grandfathering period is set to close at the end of June, which is expected to lead to market consolidation, with smaller crypto firms struggling to comply with the new regulations. Zhou believes that this consolidation is inevitable, as many small to medium-sized crypto companies will be unable to afford the necessary investments in compliance infrastructure to remain profitable.