MiCA License Insufficient for Profitability in Europe, Says Bybit CEO

Obtaining a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Ben Zhou, CEO of Bybit, a leading cryptocurrency trading platform. In an interview, Zhou emphasized that MiCA only covers a limited range of products and that companies require additional licenses, such as MiFID II and Electronic Money Institution (EMI) licenses, to offer a broader range of services, including derivatives and tokenized assets. "With the current MiCA framework, you can only do fiat-to-crypto, crypto-to-crypto," Zhou explained. "There are many elements of a profitable business you cannot do, so even as a MiCA holder — unless you're Kraken or BittPanda or Bitvivo, who are already making money because they have multiple licenses." Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe, with Zhou estimating that it could take up to two years to become profitable. The company's ability to afford the MiCA license is due to its large size, but smaller companies may struggle to survive due to the high costs of compliance and the need for multiple licenses. The upcoming closure of the MiCA grandfathering period at the end of June is expected to lead to market consolidation, with many small to medium-sized crypto companies shutting down due to the inability to meet the regulatory requirements. Zhou noted that "there's going to be market consolidation" and that smaller firms are already shutting down because they cannot afford the necessary investments in compliance infrastructure. The MiCA regulatory framework is also undergoing changes, with some country 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. The company remains neutral on the potential introduction of the European Securities and Markets Authority (ESMA) as a central regulator, citing concerns about increased bureaucracy and decreased efficiency.