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 such as derivatives and tokenized assets, which are essential for generating significant revenue. To overcome these limitations, companies require a MiFID II license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate a profitable business. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it awaits the acquisition of necessary licenses. The CEO views this investment as a long-term strategy, acknowledging that smaller companies may struggle to afford the compliance infrastructure required to operate profitably. The impending closure of the MiCA grandfathering period is expected to lead to market consolidation, as smaller firms may be forced to shut down due to the inability to obtain the required licenses and invest in compliance. Zhou also discussed the evolving regulatory landscape, including the potential for tighter control and increased oversight by bodies such as the European Securities and Markets Authority (ESMA). Bybit has chosen to work with a stringent regulator in Austria's FMA, a decision that Zhou believes will yield benefits in the long run. The company remains neutral on the topic of bringing ESMA into the mix, citing concerns about the potential for increased bureaucracy and decreased efficiency.