Bybit CEO Claims MiCA License Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not sufficient on its own to generate profits, according to Bybit CEO Ben Zhou. In an interview, Zhou explained that the MiCA license does not cover the full range of products necessary for profitability, such as derivatives and tokenized assets, which require a MiFID II license and an Electronic Money Institution (EMI) license. With the current MiCA framework, companies are limited to fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate a profitable business, Zhou said. Even large entities like Bybit, the world's second-largest cryptocurrency exchange by trading volume, are not yet profitable in Europe and are waiting to acquire the necessary licenses. Zhou predicted that market consolidation is imminent, particularly with the MiCA grandfathering period ending in June, which will force many small to medium-sized crypto companies to either obtain MiCA authorization or cease operations. The need for additional licenses and compliance infrastructure investments will lead to the demise of many smaller firms, resulting in market consolidation. The MiCA regulations are also undergoing changes, with some country regulators advocating for stricter control and increased oversight by bodies like the European Securities and Markets Authority (ESMA). Zhou noted that Bybit chose to register with Austria's FMA, a stringent regulator, which will pay off in the long run. He also expressed neutrality regarding the potential involvement of ESMA in the regulatory process, citing both the benefits of a level playing field and the potential drawbacks of increased bureaucracy.