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 to 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, including derivatives and tokenized assets, which are necessary for a company to be profitable. To overcome these limitations, companies need to obtain additional licenses, such as the MiFID II license and the Electronic Money Institution (EMI) license. Zhou noted that even with a MiCA license, companies can only engage in 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, with Zhou estimating that it may take up to two years to achieve profitability. The CEO attributed this timeline to the time it takes to acquire the necessary licenses. The current MiCA framework is not sufficient for companies to make a profit, and even large entities like Bybit can only afford to operate at a loss due to their size. The market is expected to undergo consolidation, with smaller companies shutting down due to the high costs of compliance and the need for additional licenses. The MiCA license allows crypto-asset service providers to operate across the European Economic Area (EEA), but the grandfathering period is coming to an end, and companies must obtain MiCA authorization by July 1. Zhou predicted that this deadline will lead to market consolidation, as smaller companies will struggle to meet the regulatory requirements. The MiCA regulations are also undergoing changes, with some country regulators calling for stricter control and increased oversight. Bybit chose to register with the Austrian FMA, which Zhou believes will pay off in the long run. The CEO remains neutral about the potential involvement of the European Securities and Markets Authority (ESMA) in the regulatory process, citing both advantages and disadvantages of a more centralized approach.