Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but according to Ben Zhou, CEO of Bybit, one of the world's largest cryptocurrency exchanges, it is not enough to guarantee profitability. Zhou emphasized that the MiCA license has limitations, as it does not cover the full range of products necessary for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to acquire additional licenses, including a MiFID II (Markets in Financial Instruments Directive) license and an Electronic Money Institution (EMI) license. Zhou explained that with the current MiCA framework, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which is not enough to sustain a profitable business. Even Bybit, the 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 CEO views this as a long-term investment, acknowledging that smaller companies may struggle to afford the compliance infrastructure required to operate profitably. The impending closure of the MiCA grandfathering period is expected to lead to market consolidation, as smaller companies may be forced to shut down due to the inability to meet the regulatory requirements. Zhou noted that Bybit has chosen to work with a stringent regulator in Austria, which will pay off in the long run, and remains neutral on the potential involvement of the European Securities and Markets Authority (ESMA) in the regulation of the crypto industry.