Bybit CEO Says MiCA License Alone Won't Generate European Profits Without Additional Regulatory Approvals

Snagging a Markets in Crypto Assets (MiCA) license to operate in Europe is great, but alone it won't be enough to turn a profit, according to Ben Zhou, CEO of Bybit, one of the world's largest cryptocurrency trading platforms. In an interview, Zhou said the exchange is at least two years away from breaking even in Europe under current regulatory frameworks.

Market Context

The European crypto-asset landscape faces a critical transition as the MiCA grandfathering period closes at the end of June, forcing firms to obtain authorization by July 1 or cease operations across the 27-member European Union plus Norway, Iceland and Liechtenstein. A MiCA license issued by one country allows a crypto-asset service provider (CASP) to operate across the entire EEA, creating both opportunity and compliance burden for platform operators.

Analysis

Zhou explained that MiCA's current scope doesn't cover derivatives or tokenized assets—the product categories essential for profitability in cryptocurrency trading. "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." To offer the full suite of products needed to generate meaningful revenue, exchanges also require a Markets in Financial Instruments Directive (MiFID II) license and an Electronic Money Institution (EMI) license.

The regulatory complexity is reshaping competitive dynamics across European crypto markets. Zhou noted that established players like Kraken, Bitpanda and Bitvivo have already achieved profitability because they hold multiple licenses. "That's why these guys are shutting down," he said, referring to smaller operators exiting the market. "Because even if they know they could afford MiCA, they're like, 'WTF, I need MiFID and EMI to make money, and I need to make a whole lot of investment in compliance infrastructure to be able to be profitable?'"

Bybit chose Austria's Financial Market Authority (FMA) as its MiCA licensing jurisdiction—a decision Zhou said reflects the firm's long-term strategy. "Some countries interpret it as a way to attract new business; some want heavy regulation," he noted. "So you actually have different levels of strictness." The Austrian regulator's approach is considered among the more stringent in the EEA.

Regulatory evolution continues as European authorities debate whether to expand oversight. Talks persist about bringing the European Securities and Markets Authority (ESMA) into the regulatory framework, which Zhou said could create both benefits and drawbacks. "When you have a local regulator they are easy to get to," he explained. "If we have any issues, we just send an email and go to FMA in Vienna. But if everyone's in Paris, then you have to line up." ESMA recently reminded crypto firms that perpetual futures products may fall outside MiCA's scope.

Key Numbers

- Two years: Zhou's estimated timeline for Bybit profitability in Europe under current licensing approach

- July 1, 2026: Deadline for obtaining MiCA authorization or ceasing EEA operations

- Three license types required for full product suite: MiCA, MiFID II, and EMI

- Second-largest: Bybit's global ranking by cryptocurrency trading volume among centralized exchanges

What to Watch

Watch for market consolidation as smaller crypto firms exit the European market before the June 30 grandfathering deadline. Monitor Bybit's progress toward obtaining MiFID II and EMI licenses—Zhou indicated these approvals are prerequisites for profitability. Track ESMA guidance on structured products, particularly perpetual futures classifications that may affect trading strategies. Assess how different national regulator interpretations of MiCA create competitive advantages or disadvantages across EEA jurisdictions.

The regulatory landscape remains fluid as European authorities balance investor protection with industry competitiveness. Zhou characterized Bybit's current MiCA-only operations in Europe as "a long-term investment" rather than a profit center, suggesting the exchange is prepared for an extended compliance buildout before achieving regional profitability.