Bybit CEO: MiCA License Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but according to Bybit CEO Ben Zhou, it is not enough to guarantee profitability. 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 substantial revenue. To overcome this hurdle, companies must also obtain a MiFID II license and an Electronic Money Institution license. Zhou emphasized that even with a MiCA license, companies like Bybit are restricted to offering only fiat-to-crypto and crypto-to-crypto services, which is not enough to sustain a profitable business. The CEO noted that Bybit, despite being the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe and anticipates that it may take around two years to achieve profitability. The current market landscape is poised for consolidation, particularly with the MiCA grandfathering period coming to a close, which is expected to lead to the demise of many smaller crypto firms. Zhou attributed this to the significant investment required to comply with regulatory infrastructure and obtain necessary licenses. The regulatory environment is also undergoing changes, with some country regulators advocating for more stringent control and increased oversight. Bybit has chosen to work with Austria's FMA, a regulator known for its strict standards, which Zhou believes will yield long-term benefits. The CEO expressed neutrality regarding the potential involvement of the European Securities and Markets Authority, citing both the benefits of a level playing field and the potential drawbacks of increased bureaucracy.