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 CEO Ben Zhou, it is not enough on its own to generate a profit. The current MiCA framework has limitations, particularly with regards to derivatives and tokenized assets, which necessitates the acquisition of a MiFID II license and an Electronic Money Institution license to achieve profitability. In an interview, Zhou explained that the MiCA license only permits fiat-to-crypto and crypto-to-crypto transactions, leaving out key components of a profitable business. He noted that even with a MiCA license, companies like Bybit are not yet profitable, unless they have secured multiple licenses. The timeline for Bybit to break even in Europe is contingent upon obtaining the required licenses, with Zhou estimating a two-year period. He views the investment as a long-term strategy, acknowledging that the company can afford it due to its size. The crypto market in Europe is on the cusp of significant change, particularly with the impending closure of the MiCA grandfathering period at the end of June. This deadline necessitates that crypto-asset service providers obtain MiCA authorization to operate across the region by July 1, a requirement that is expected to lead to market consolidation and the potential demise of smaller crypto firms. Zhou anticipates market consolidation, stating that smaller companies are shutting down due to the need for additional licenses and substantial investment in compliance infrastructure to achieve profitability. The MiCA framework itself is undergoing changes, with some regulators advocating for stricter control and increased oversight. Bybit has chosen to work with a stringent regulator in Austria, a decision that Zhou believes will yield benefits in the long run. He remains neutral on 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.