MiCA License Insufficient for Profitability in Europe, Says Bybit CEO

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 Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. 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 offer these products, companies need to obtain additional licenses, including 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, which is not enough to sustain 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, depending on when the company acquires the necessary licenses. The CEO views the MiCA license as a long-term investment, acknowledging that market consolidation is imminent, particularly with the MiCA grandfathering period ending in June. This deadline is expected to lead to the closure of many small to medium-sized crypto companies in Europe, as they struggle to meet the regulatory requirements and invest in compliance infrastructure. 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. Bybit has chosen to work with a stringent regulator in Austria, which Zhou believes will pay off in the long run. Ultimately, the CEO remains neutral about the potential involvement of ESMA, citing concerns about increased bureaucracy and decreased efficiency.