Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets license to operate in Europe is a significant achievement, but it does not guarantee profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou explained that the MiCA license has limitations, as it only covers a portion of the products needed to generate substantial revenue, such as derivatives and tokenized assets. To offer these products, companies require a MiFID II license and an Electronic Money Institution license. Zhou noted that even with a MiCA license, companies like Bybit are restricted to fiat-to-crypto and crypto-to-crypto transactions, which are not enough to sustain a profitable business. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still at least two years away from breaking even in Europe, according to Zhou. The timeline for profitability depends on when the company acquires the necessary licenses. Zhou views the MiCA license as a long-term investment, stating that the company can afford it due to its size. However, he acknowledges that smaller companies may struggle to comply with the regulatory requirements. The MiCA grandfathering period is set to end in June, and companies must obtain authorization to operate across the European Economic Area by July 1. This deadline is expected to lead to market consolidation, with smaller firms potentially shutting down due to the high compliance costs. Zhou predicts that the industry will experience significant changes, with some regulators pushing for stricter 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 involvement of the European Securities and Markets Authority in regulating the crypto industry.