MiCA License Insufficient for Profitability in Europe, Says Bybit CEO

Acquiring a Markets in Crypto Assets (MiCA) license is a crucial step for cryptocurrency trading platforms to operate in Europe, but it is not a guarantee of profitability, according to Ben Zhou, the CEO of Bybit, a leading cryptocurrency exchange. In an interview, Zhou emphasized that the MiCA license alone is insufficient, as it does not cover the full range of products required to generate significant revenue, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. Zhou noted that even with a MiCA license, companies can only facilitate fiat-to-crypto and crypto-to-crypto transactions, limiting their ability to operate 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 company's timeline for profitability depends on its ability to acquire the necessary licenses. Zhou views the MiCA license as a long-term investment, stating that the company can afford it due to its size, but smaller companies may struggle to comply with the regulatory requirements. The MiCA grandfathering period is set to end in June, and companies must obtain MiCA authorization to operate across the European Economic Area (EEA) by July 1. This deadline is expected to lead to market consolidation, with smaller crypto firms shutting down due to the regulatory burdens and investment required to comply with the MiCA framework. Zhou believes that the MiCA license is just the starting point, and companies need to prepare for further regulatory changes and investments in compliance infrastructure to remain profitable. Bybit has chosen to work with a stringent regulator in Austria's FMA, 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 (ESMA) in the regulatory process, citing both potential advantages and disadvantages of a more centralized regulatory approach.