Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing 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 to guarantee profitability. The MiCA license has limitations, as it does not cover a wide range of products such as derivatives and tokenized assets, which are essential for a company to be profitable. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution license. Zhou explained that with the current MiCA framework, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate a profitable business. Even Bybit, the second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it awaits the acquisition of the necessary licenses. The CEO views this as a long-term investment, stating that the company can afford to wait due to its size. The upcoming deadline for the MiCA grandfathering period is expected to lead to market consolidation, as smaller crypto companies may struggle to meet the regulatory requirements. Zhou predicts that many of these companies will shut down, as the cost of obtaining the necessary licenses and complying with regulations will be too high. The MiCA regulations are also subject to change, with some regulators pushing for more centralized control and increased oversight. Bybit has chosen to work with the Austrian regulator, which Zhou believes will pay off in the long run. He also expressed neutrality regarding the potential involvement of the European Securities and Markets Authority in the regulatory process, citing both potential benefits and drawbacks.