Market News

EU Regulatory Landscape: Bybit CEO Highlights Need for Comprehensive Licensing

Ben Zhou, the CEO of Bybit, has emphasized that obtaining a Markets in Crypto Assets (MiCA) license is just the beginning for companies seeking profitability in Europe.

He noted that MiCA does not encompass all necessary financial products, such as derivatives and tokenized assets, which require additional licenses like MiFID II and Electronic Money Institution (EMI).

Zhou pointed out that, under the current MiCA regulations, companies are limited to fiat-to-crypto and crypto-to-crypto transactions, restricting their earning potential.

Even Bybit, renowned as the world's second-largest cryptocurrency exchange by trading volume, is struggling to achieve profitability in Europe, contingent on acquiring these essential licenses.

While he believes profitability could be achievable within two years, Zhou acknowledged that the pathway remains challenging due to regulatory complexities.

The imminent closure of the MiCA grandfathering period at the end of June raises concerns that many small to medium-sized crypto firms may not survive without these additional licenses.

Zhou predicts significant market consolidation as a result, forcing many firms to consider whether the investment in compliance infrastructure is justifiable.

He highlighted that each country's interpretation of MiCA can differ, with Austria’s FMA chosen by Bybit for its stringent regulatory approach.

This variance creates an uneven playing field, as some jurisdictions are more welcoming to new businesses than others, impacting operational efficiency.

As discussions about increasing oversight by bodies like the European Securities and Markets Authority (ESMA) progress, Zhou remains neutral but cautious about the implications for market dynamics.