Bybit CEO Claims MiCA License Alone Insufficient for Profitability in Europe

Obtaining a Markets in Crypto Assets license is a crucial step for operating in Europe, but Bybit's CEO, Ben Zhou, emphasizes that it is not enough to guarantee profitability. According to Zhou, 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 revenue. To address this, companies need to acquire a MiFID II license and an Electronic Money Institution license in addition to the MiCA license. Zhou explained that with the current MiCA framework, companies can only engage in fiat-to-crypto and crypto-to-crypto transactions, which restricts their ability to operate 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 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 market consolidation is expected to affect small to medium-sized crypto companies in Europe, as the MiCA grandfathering period is set to close at the end of June. This deadline will likely lead to the closure of many smaller firms, as they will be required to obtain MiCA authorization to operate across the region by July 1. Zhou predicts that this will result in market consolidation, as smaller companies may not be able to afford the necessary investments in compliance infrastructure to remain profitable. The MiCA regulations are also undergoing changes, with some country regulators pushing for more centralized control and increased oversight. Bybit has chosen to work with Austria's FMA, a stringent regulator, which Zhou believes will have long-term benefits. The company remains neutral on the potential involvement of the European Securities and Markets Authority in the regulatory process.