Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for cryptocurrency trading platforms to operate 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 emphasized that a MiCA license only allows for fiat-to-crypto and crypto-to-crypto transactions, excluding other essential products like derivatives and tokenized assets that are necessary for a profitable business. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it awaits the acquisition of the necessary licenses. Zhou views the current MiCA framework as a long-term investment, acknowledging that smaller crypto companies may struggle to survive due to the costs and regulatory requirements associated with obtaining multiple licenses. The impending closure of the MiCA grandfathering period at the end of June is expected to lead to market consolidation, with many small to medium-sized crypto companies likely to shut down due to the inability to afford the required licenses and compliance infrastructure. The regulatory landscape is also evolving, with some country regulators pushing for stricter control and increased oversight, while the European Securities and Markets Authority (ESMA) reminds crypto firms that certain products, such as perpetual futures, may fall outside the rules. Bybit has chosen to work with a stringent regulator in Austria's FMA, which Zhou believes will pay off in the long run, despite the potential for increased bureaucracy if ESMA is granted more oversight.