Ben Zhou, CEO of the leading cryptocurrency trading platform Bybit, contends that merely obtaining a Markets in Crypto Assets (MiCA) license is insufficient to achieve profitability in Europe. Although MiCA enables operation across the continent, it does not encompass all necessary product offerings like derivatives and tokenized assets, which are essential for financial success.
According to Zhou, companies also require a MiFID II license and an Electronic Money Institution (EMI) license to cover these gaps. “MiCA allows only for fiat-to-crypto and crypto-to-crypto transactions,” he explained in an interview. “There are numerous elements of a profitable business that you cannot pursue with just a MiCA license, unless your company already holds multiple licenses like Kraken or Bitpanda.”
Even Bybit, the world’s second-largest cryptocurrency exchange by trading volume, is not yet breaking even in Europe, as Zhou noted. The firm’s path to profitability hinges on acquiring these additional licenses.
“Operating under just a MiCA license doesn’t yield profits for us,” he stated. “However, our substantial size allows us to bear the cost as a long-term investment.” He estimates that reaching profitability could take up to five years but hopes it will be achieved within two years.
A MiCA license, once issued by any European Economic Area (EEA) member country, permits operations throughout all 27 EU countries and Norway, Iceland, and Liechtenstein. The current period for obtaining this authorization ends soon, marking a pivotal moment for smaller crypto firms in Europe. By July 1, companies must secure MiCA authorization or face operational closure.
“Market consolidation is imminent,” Zhou remarked. “Firms are shutting down because even if they can afford the MiCA license, they realize additional investments in compliance infrastructure, such as acquiring MiFID and EMI licenses, are necessary for profitability.”
Amidst ongoing changes to MiCA—some regulators call for tighter control by authorities like the European Securities and Markets Authority (ESMA)—Bybit opted for Austria’s stringent FMA regulation. Zhou believes this choice will be beneficial. He noted that each country interprets MiCA differently, with some aiming to attract businesses while others enforce heavy regulations.
Regarding ESMA’s increased involvement, Bybit maintains a neutral stance. “There are discussions about leveling the playing field,” Zhou mentioned. “However, there could be drawbacks. Local regulators are accessible; issues can be resolved quickly by contacting FMA in Vienna. If all oversight were centralized in Paris, it would lead to longer wait times and decreased efficiency due to increased bureaucracy.”