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's CEO, Ben Zhou, it is not enough to guarantee profitability. The MiCA license has limitations, as it does not cover the full spectrum of products necessary for a company to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution license. Zhou emphasized that even with a MiCA license, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which is not sufficient to generate substantial profits. Only companies with multiple licenses, like Kraken or Bitpanda, can achieve profitability. Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still far from breaking even in Europe. The timeline for achieving profitability depends on when the company acquires the necessary licenses. Zhou stated that it may take around two years for the company to become profitable, considering it as a long-term investment. The MiCA license allows a crypto-asset service provider to operate across the European Economic Area. However, the grandfathering period ends in June, and companies must obtain MiCA authorization by July 1 to continue operating in the region. This deadline is expected to lead to market consolidation, with smaller crypto firms shutting down due to the inability to afford the required licenses and compliance infrastructure. Zhou expects market consolidation, as smaller companies may not be able to afford the necessary investments in compliance infrastructure to become profitable. The MiCA framework is also undergoing changes, with some regulators pushing for tighter control and increased oversight. Bybit chose to register with Austria's FMA, which Zhou believes will pay off in the long run. The company remains neutral about the potential involvement of the European Securities and Markets Authority in the regulatory process.