Bybit CEO: 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 it is not enough to guarantee profitability, according to Bybit CEO Ben Zhou. Zhou explained that 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 generating revenue. To overcome these limitations, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution (EMI) license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to offering only fiat-to-crypto and crypto-to-crypto services, which are not enough to ensure profitability. The CEO stated that Bybit is still a long way from breaking even in Europe, with a projected timeline of at least two years, depending on when the company acquires the necessary licenses. Zhou also predicted that the crypto market in Europe will experience consolidation, as smaller companies struggle to meet the regulatory requirements and obtain the necessary licenses. The MiCA grandfathering period is set to end in June, and companies must obtain MiCA authorization to operate across the region by July 1. Zhou believes that this deadline will lead to the closure of many smaller crypto firms, as they will be unable to afford the necessary investments in compliance infrastructure. The MiCA regulations are also undergoing changes, with some country regulators pushing for stricter control and increased oversight. Zhou stated that Bybit chose to register with the Austrian regulator, FMA, which has a reputation for being stringent, and believes that this decision will pay off in the long run. However, Zhou expressed concerns about the potential drawbacks of bringing the European Securities and Markets Authority (ESMA) into the regulatory mix, citing the potential for increased bureaucracy and decreased efficiency.