Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Securing 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 on its own to guarantee profitability. Zhou explained that the MiCA license does not cover the full range of products necessary for a company to be profitable, such as derivatives and tokenized assets, which require additional licenses like MiFID II and Electronic Money Institution licenses. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still some distance away from breaking even in Europe, with Zhou estimating a timeline of around two years, dependent on acquiring the necessary licenses. The current MiCA framework only allows for fiat-to-crypto and crypto-to-crypto transactions, limiting the potential for profitability. Zhou noted that even with a MiCA license, companies like Bybit are not yet making money, but can afford to wait due to their size. The looming market consolidation, driven by the upcoming deadline for MiCA authorization, is expected to have a significant impact on smaller crypto companies in Europe. Zhou predicted that many of these companies will be forced to shut down due to the inability to afford the necessary investments in compliance infrastructure. The MiCA regulations themselves are also undergoing changes, with some regulators pushing for tighter control and increased oversight. Bybit has chosen to work with Austria's FMA, a stringent regulator, which Zhou believes will pay off in the long run. He also expressed neutrality on the potential involvement of the European Securities and Markets Authority, citing both the potential benefits of a level playing field and the drawbacks of increased bureaucracy.