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 is not enough to guarantee profitability, according to Ben Zhou, CEO of Bybit, a leading cryptocurrency exchange. Zhou emphasized that the MiCA framework has limitations, as it does not cover the full range of products required for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to fiat-to-crypto and crypto-to-crypto transactions, which is not enough to generate significant profits. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still at least two years away from breaking even in Europe, according to Zhou. The timeline for breaking even depends on when the company acquires the necessary licenses. Zhou views the current MiCA license as a long-term investment, stating that the company can afford it due to its size. The CEO predicts that market consolidation is imminent, particularly with the MiCA grandfathering period ending in June. This deadline will likely lead to the closure of many small to medium-sized crypto companies in Europe, as they will be required to obtain MiCA authorization to operate across the region. Zhou believes that the requirement for additional licenses, such as MiFID and EMI, will be a significant obstacle for these companies, leading to market consolidation. The MiCA framework is also undergoing changes, with some regulators pushing for stricter control and increased oversight. Zhou stated that Bybit chose to register with Austria's FMA, a stringent regulator, which will pay off in the long run. He also noted that each country interprets MiCA differently, resulting in varying levels of strictness. Regarding the potential involvement of the European Securities and Markets Authority (ESMA), Zhou expressed neutrality, citing both potential benefits and drawbacks.