Bybit CEO Claims MiCA License Alone is 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 Ben Zhou, CEO of Bybit, a leading cryptocurrency exchange. In an interview, 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 (Markets in Financial Instruments Directive) 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 enough to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe, with a timeline that depends on acquiring the necessary licenses. Zhou estimated that it may take around two years for the company to become profitable. The CEO also predicted that the crypto market in Europe is on the verge of consolidation, as smaller companies struggle to meet the regulatory requirements. 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 are unable to afford the necessary investments in compliance infrastructure. The MiCA regulations are also undergoing changes, with some country regulators pushing for tighter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria's FMA, which Zhou believes will pay off in the long run. However, the CEO is neutral about the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process.