Securing a Markets in Crypto Assets (MiCA) license is becoming a baseline requirement for operating in Europe, but it is not sufficient to build a profitable business, according to Bybit CEO Ben Zhou. In an interview, Zhou explained that the MiCA framework only allows firms to offer basic services such as fiat-to-crypto and crypto-to-crypto trading, excluding higher-margin products like derivatives and tokenized assets.
“With the current MiCA framework, you can only do fiat-to-crypto, crypto-to-crypto,” Zhou said. “There are many elements of a profitable business you cannot do, so even as a MiCA holder — unless you're Kraken or Bitpanda or Bitvivo, who are already making money because they have multiple licenses.” To offer a full suite of services, firms must also secure a MiFID II license and an Electronic Money Institution (EMI) license. Even Bybit, the world’s second-largest cryptocurrency exchange by trading volume, is not currently profitable in Europe under its existing setup. Zhou said it could take up to two years to break even once the additional licenses are obtained.
The regulatory landscape is tightening. The MiCA grandfathering period closes at the end of June, meaning firms must obtain full authorization by July 1 to continue operating across the European Economic Area (EEA). This deadline is expected to force many smaller firms out of the market. “There’s going to be market consolidation,” Zhou said. “That's why these guys are shutting down. Because even if they know they could afford MiCA, they're like, 'WTF, 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?’”
MiCA implementation is not uniform across Europe. Zhou noted that Bybit chose to work with Austria’s Financial Market Authority (FMA) due to its stricter stance, which he believes will pay dividends long-term. At the same time, there are ongoing discussions about increasing the role of the European Securities and Markets Authority (ESMA) to create a more centralized oversight model. Zhou said Bybit remains neutral on the idea, citing potential disadvantages such as increased bureaucracy. Recent comments from ESMA also indicate that some products, including perpetual futures, may fall outside current rules.
