Bybit CEO Claims MiCA License Insufficient for Profitability in Europe

Acquiring a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not enough on its own to guarantee profitability, according to Bybit CEO Ben Zhou. The MiCA framework has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are essential for generating significant revenue. To overcome these limitations, companies must also obtain a MiFID II license and an Electronic Money Institution (EMI) license. Zhou emphasized that even with a MiCA license, many aspects of a profitable business cannot be realized, making it essential to have multiple licenses to succeed. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still some distance away from breaking even in Europe, with a timeline dependent on acquiring the necessary licenses. Zhou views this as a long-term investment, anticipating that the company will become profitable within two years. The crypto market in Europe is on the verge of significant consolidation, particularly with the impending closure of the MiCA grandfathering period at the end of June. This deadline will force many small to medium-sized crypto companies to either obtain MiCA authorization or cease operations. The need for additional licenses and significant investment in compliance infrastructure will lead to market consolidation, as smaller firms may struggle to adapt. Zhou chose to work with a stringent regulator in Austria's FMA, believing this decision will yield benefits in the long run. The interpretation of MiCA varies across countries, with some adopting a more relaxed approach to attract new businesses, while others prefer stricter regulation. Regarding the potential involvement of the European Securities and Markets Authority (ESMA) in regulating the crypto market, Zhou expressed neutrality, citing both the potential benefits of a level playing field and the drawbacks of increased bureaucracy.