Bybit CEO Claims 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. 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 (EMI) license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Even large entities like Bybit, the world's second-largest cryptocurrency exchange by trading volume, are not expected to break even in Europe anytime soon. Zhou estimates that it may take around two years for Bybit to become profitable in Europe, depending on when the company acquires the necessary licenses. The CEO believes that market consolidation is inevitable, especially with the MiCA grandfathering period coming to an end. Small to medium-sized crypto companies in Europe are facing a critical juncture, as they must obtain MiCA authorization to operate across the region by July 1. The MiCA license allows a crypto-asset service provider to operate across the European Economic Area (EEA), but the requirements and regulations vary across countries. Zhou noted that Bybit chose to register with Austria's FMA, a stringent regulator, which 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 regulation of crypto firms, citing both advantages and disadvantages of a more centralized approach.