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 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, which are essential for a company to be profitable. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions. He noted that even with a MiCA license, a company cannot engage in many aspects of a profitable business, unless it has multiple licenses like some of the larger players in the industry. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe. The timeline for achieving profitability depends on when the company acquires the necessary licenses. Zhou stated that the company can afford to operate at a loss due to its size, but he expects Bybit to become profitable within two years. The MiCA license allows a crypto-asset service provider to operate across the European Economic Area. However, the grandfathering period is coming to an end, and small to medium-sized crypto companies must obtain MiCA authorization by July 1 to continue operating in the region. This deadline is expected to lead to market consolidation, with many smaller firms shutting down due to the high costs of compliance and the need for additional licenses. Zhou predicted that there will be significant market consolidation, with many smaller companies unable to afford the necessary investments in compliance infrastructure. He also noted that MiCA is undergoing changes, with some regulators calling for stricter control and increased oversight. Bybit chose to register with Austria's FMA, which Zhou believes will pay off in the long run. He also stated that Bybit is neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process.