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

Securing 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. 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 a company to be profitable. To offer these products, companies require a MiFID II license and an Electronic Money Institution 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 large entities like Bybit, the world's second-largest cryptocurrency exchange by trading volume, are not yet profitable in Europe and are waiting to acquire the necessary licenses. The timeline for breaking even depends on when these licenses are obtained, with Zhou estimating it could take around two years. The CEO also anticipates market consolidation, as smaller crypto companies may struggle to survive due to the costs and regulatory requirements associated with obtaining the necessary licenses. The MiCA license allows crypto-asset service providers to operate across the European Economic Area, but the grandfathering period is coming to an end, and firms must have obtained MiCA authorization by July 1. Zhou believes that this deadline will lead to the closure of many smaller crypto firms, resulting in market consolidation. Additionally, MiCA is 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.