Bybit CEO Claims MiCA License Alone is Insufficient for Profitability in Europe

Obtaining 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 generating significant revenue. To overcome this, companies require 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 is not sufficient for a profitable business. Even Bybit, the world's second-largest cryptocurrency exchange by trading volume, is not expected to break even in Europe for at least two years, as it depends on acquiring the necessary licenses. The CEO views this as a long-term investment, stating that the company can afford it due to its large size. The upcoming market consolidation is expected to have a significant impact on small to medium-sized crypto companies in Europe, as the MiCA grandfathering period is set to close at the end of June. This means that firms must obtain MiCA authorization to operate across the region by July 1, which is expected to lead to the demise of many smaller crypto firms. Zhou predicted that there will be market consolidation, as many companies will struggle to afford the necessary licenses and compliance infrastructure to remain profitable. The MiCA regulations are also undergoing changes, with some country regulators advocating 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 introduction of ESMA, as it could lead to a more level playing field but also increased bureaucracy and decreased efficiency.