Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing 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 current MiCA framework has limitations, restricting the range of products that can be offered, such as derivatives and tokenized assets, which are essential for generating revenue. To overcome these limitations, companies require additional licenses, including a MiFID II license and an Electronic Money Institution license. Zhou emphasized that even with a MiCA license, many elements of a profitable business cannot be implemented, making it challenging for companies to turn a profit without multiple licenses. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe, with a projected timeline of at least two years. The company's ability to afford the investment is due to its large size, but smaller crypto companies may struggle to survive due to the upcoming market consolidation. The MiCA grandfathering period is set to end, and firms must obtain authorization to operate across the region by July 1, which is expected to lead to the closure of many smaller crypto firms. Zhou predicts market consolidation, stating that smaller companies are shutting down due to the high costs of compliance infrastructure and the need for additional licenses to be profitable. The MiCA regulations are also undergoing changes, with some country regulators pushing for more centralized control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, which Zhou believes will pay off in the long run. The company remains neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process.