Bybit CEO: MiCA License Alone Insufficient for Profitability in Europe

Securing a Markets in Crypto Assets (MiCA) license is a crucial step for operating in Europe, but it is not enough to guarantee profitability, according to Bybit CEO Ben Zhou. In an interview, Zhou emphasized that 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 overcome these limitations, companies need to obtain additional licenses, including a MiFID II license and an Electronic Money Institution (EMI) 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, acknowledging that the company can afford to wait due to its size. The impending market consolidation is expected to impact small to medium-sized crypto companies in Europe, as the MiCA grandfathering period is set to close at the end of June, requiring firms to obtain MiCA authorization to operate across the region by July 1. Zhou anticipates that this deadline will lead to the closure of many smaller crypto firms, as they struggle to afford the necessary investments in compliance infrastructure to remain profitable. The MiCA regulations are also undergoing changes, with some country 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 (ESMA) in the regulatory process.