Why Is a MiCA License Not Enough to Run a Profitable Crypto Business?
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. The framework allows firms to offer basic services such as fiat-to-crypto and crypto-to-crypto trading, but excludes higher-margin products.
“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 derivatives, structured products, and broader financial services, firms must also secure additional approvals, including a MiFID II license and an Electronic Money Institution (EMI) license. Without these, exchanges are limited in their ability to generate diversified revenue streams.
Even large platforms are affected. Zhou said Bybit is not currently profitable in Europe under its existing setup, highlighting the gap between regulatory compliance and commercial viability.
How Do Additional Licenses Shape the Business Model?
MiFID II authorization enables firms to offer derivatives and other financial instruments, while EMI licensing allows them to handle fiat payments and issue electronic money. Together, these permissions form the foundation for a full-service trading platform in Europe.
Without them, crypto firms are restricted to lower-margin activities, limiting their ability to compete with established financial institutions or fully replicate their global product offerings.
“We don’t make money under the current MiCA license. But we’re able to afford it because we’re a big entity. For us, it’s a long-term investment,” Zhou said. “It could be five years away, but I think that is a bit long. I would assume we are probably going to be profitable within two years.”
Investor Takeaway
Why Is Market Consolidation Expected in Europe?
The regulatory timeline is tightening. The MiCA grandfathering period ends at the end of June, requiring firms to obtain full authorization by July 1 to continue operating across the European Economic Area.
This deadline is expected to force smaller firms out of the market. Many face rising compliance costs and the need for multiple licenses, which significantly increases the capital required to operate.
“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?’”
A single MiCA license allows firms to passport services across the EU, as well as Norway, Iceland, and Liechtenstein. However, the cost of reaching full compliance across multiple regulatory layers is creating a barrier that favors larger players.
Investor Takeaway
How Could Regulatory Centralization Affect the Market?
MiCA implementation is not uniform across Europe. National regulators interpret the framework differently, with some adopting stricter approaches and others focusing on attracting new business.
Zhou said Bybit chose to work with Austria’s Financial Market Authority, citing its stricter stance as a long-term advantage. He noted that regulatory fragmentation creates varying levels of compliance burden depending on jurisdiction.
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.
“There are talks about a more level playing field,” he said. “But there could be disadvantages. Because when you have a local regulator they are easy to get to. 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. There are more CASPs, increased bureaucracy, decreased efficiency.”
Recent comments from ESMA also indicate that some products, including perpetual futures, may fall outside current rules, adding another layer of uncertainty for firms building out derivatives offerings.
