Bybit CEO: MiCA License Alone 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 on its own to achieve profitability, according to Bybit CEO Ben Zhou. The MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets that are necessary for a company to be profitable. Zhou emphasized that to offer these products, companies also need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. The current MiCA framework restricts companies to fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient for a profitable business model. Even large entities like Bybit, the world's second-largest cryptocurrency exchange by trading volume, are not yet breaking even in Europe. The timeline for breaking even depends on acquiring the necessary licenses, with Zhou estimating it could take around two years. The crypto market in Europe is at a critical juncture, especially with the MiCA grandfathering period ending soon. Small to medium-sized crypto companies face significant challenges in obtaining the required licenses and complying with regulatory requirements. This is expected to lead to market consolidation, with smaller firms potentially shutting down due to the high costs of compliance and the need for multiple licenses to operate profitably. The regulatory environment for MiCA is also evolving, with some countries pushing for stricter controls and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, which Zhou believes will have long-term benefits. The company remains neutral on the potential involvement of the European Securities and Markets Authority (ESMA) in regulating the crypto market, citing both potential advantages and disadvantages.