MiCA License Alone Insufficient for Profitability in Europe, Says Bybit CEO

Obtaining a Markets in Crypto Assets license is a crucial step for cryptocurrency trading platforms to operate in Europe, but it is not enough to guarantee profitability, according to Ben Zhou, CEO of Bybit. Zhou emphasized that the MiCA license has limitations, as it does not cover the full range of products necessary for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to acquire additional licenses, including a MiFID II license and an Electronic Money Institution license. 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 company's ability to afford the costs associated with the MiCA license is due to its large size, but smaller firms may struggle to stay afloat. The upcoming deadline for the MiCA grandfathering period is expected to lead to market consolidation, with smaller firms shutting down due to the high costs of compliance and the need for multiple licenses. Zhou believes that the MiCA framework will undergo changes, with some regulators pushing for stricter control and increased oversight. Bybit has chosen to work with the Austrian regulator, FMA, which Zhou believes will pay off in the long run due to its stringent standards.