Bybit CEO Claims MiCA License 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 explained that the MiCA license has limitations, as it does not cover the full range of products required to be profitable, such as derivatives and tokenized assets. To offer these products, companies need to obtain a MiFID II license and an Electronic Money Institution (EMI) license. "With the current MiCA framework, you can only do fiat-to-crypto, crypto-to-crypto," Zhou stated. "There are many elements of a profitable business you cannot do, so even as a MiCA holder — unless you're a large entity with multiple licenses, you won't be able to turn a profit." Bybit, the world's second-largest cryptocurrency exchange by trading volume, is still some way off from breaking even in Europe, with Zhou estimating it could take around two years. The timeline depends on when the firm acquires the necessary licenses. Market consolidation is expected, particularly with the MiCA grandfathering period ending, which will likely lead to the closure of many smaller crypto firms. Zhou noted, "There's going to be market consolidation. That's why these guys are shutting down. Because even if they know they could afford MiCA, they're like, 'I need [MiFID, EMI] to make money, and I need to make a whole lot of investment in compliance infrastructure to be able to be profitable?'" The MiCA regulations are also undergoing changes, with some country regulators pushing for tighter control and increased oversight. Bybit chose to register with Austria's FMA, a decision 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.