Bybit CEO Claims MiCA License Alone is Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets license is a crucial step for operating in Europe, but according to Bybit's CEO, Ben Zhou, it is not enough to guarantee profitability. The MiCA license has limitations, as it does not cover the full spectrum of products required for a company to be profitable, such as derivatives and tokenized assets. 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, 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, as it awaits the acquisition of the necessary licenses. The timeline for breaking even depends on when the company obtains the required licenses. Zhou views the current investment in MiCA as a long-term strategy, stating that the company can afford it due to its size. The CEO predicts that market consolidation is imminent, particularly with the MiCA grandfathering period ending in June, which will likely lead to the closure of many small to medium-sized crypto companies in Europe. The regulatory landscape is also evolving, with some country regulators pushing for stricter control and increased oversight. Zhou believes that Bybit's decision to choose a stringent regulator in Austria's FMA will pay off in the long run, despite the varying levels of strictness in different countries. Regarding the potential involvement of the European Securities and Markets Authority, Zhou remains neutral, citing both the potential benefits of a level playing field and the drawbacks of increased bureaucracy.