Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but according to Ben Zhou, CEO of Bybit, one of the largest cryptocurrency trading platforms, it is not enough to guarantee profitability. In an interview, Zhou emphasized that MiCA only covers a limited range of products and that companies also require a MiFID II license and an Electronic Money Institution (EMI) license to offer a broader range of services such as derivatives and tokenized assets. 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, depending on when the firm obtains the necessary licenses. The current MiCA framework only allows for fiat-to-crypto and crypto-to-crypto transactions, limiting the potential for profitability. Even with a MiCA license, companies need multiple licenses to operate a profitable business, which is a challenge for smaller firms. The MiCA grandfathering period is set to close at the end of June, which is expected to lead to market consolidation as smaller firms struggle to meet the regulatory requirements. Zhou believes that the industry will see significant consolidation, with smaller firms shutting down due to the high costs of compliance and the need for additional licenses. The MiCA regulations are also undergoing changes, with some country regulators calling for more centralized control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, which Zhou believes will pay off in the long run. The company is neutral on the idea of bringing in the European Securities and Markets Authority (ESMA) to oversee the industry, citing concerns about increased bureaucracy and decreased efficiency.