Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but it does not guarantee profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou emphasized 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 must also obtain a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies can only facilitate 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 and is relying on its size to absorb the costs. Zhou predicted that it may take up to two years for the company to become profitable in the region. The CEO also warned that the upcoming deadline for the MiCA grandfathering period, which ends in June, will lead to market consolidation, as smaller crypto companies struggle to meet the regulatory requirements. Zhou believes that this consolidation is inevitable, as many small to medium-sized companies will be unable to afford the necessary investments in compliance infrastructure to remain competitive. The MiCA framework is also undergoing changes, with some regulators pushing for more centralized control and increased oversight. Zhou stated that Bybit chose to work with Austria's FMA, a stringent regulator, which will ultimately benefit the company in the long run. However, he expressed concerns about the potential drawbacks of bringing ESMA into the regulatory mix, citing the potential for increased bureaucracy and decreased efficiency.