Bybit CEO: MiCA License Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets license is essential but not enough to generate profits in Europe, according to Bybit CEO Ben Zhou. The current MiCA framework has limitations, as it only allows for fiat-to-crypto and crypto-to-crypto transactions, excluding other profitable products like 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, profitability is unlikely without these additional licenses, unless a company already has multiple licenses like Kraken or Bitpanda. Bybit, the second-largest cryptocurrency exchange, is still far from breaking even in Europe and is making the MiCA license a long-term investment. The company expects to become profitable within two years, depending on when it acquires the necessary licenses. The impending market consolidation is expected to impact small to medium-sized crypto companies, as the MiCA grandfathering period ends in June, requiring firms to obtain authorization by July 1. This deadline may lead to the closure of many smaller crypto firms, as they may not be able to afford the necessary investments in compliance infrastructure to become profitable. The MiCA regulations are also undergoing 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 the regulatory process.