As the enforcement of the Markets in Crypto-Assets (MiCA) framework approaches, cryptocurrency exchanges that have received approval to operate within the European Union are actively encouraging users from rival platforms that did not secure licenses. With the new regulations set to take effect on July 1, 2023, many exchanges, including Coinbase and OKX, have utilized social media to attract users away from companies like Binance and Bybit Global, which have recently seen their licensing applications fail.
After withdrawing its MiCA application last week, Binance, the world’s largest cryptocurrency exchange, announced it would begin restricting services for users based in the EU. In parallel, Bybit Global indicated that access to its services for users in the European Economic Area will face gradual limitations starting on the same date. However, Bybit EU retains the necessary licensing to operate in the region through an Austrian licensee.
Currently, regulators across EU member states have issued a total of 244 licenses under MiCA, with a significant number—57—granted by Germany’s Federal Financial Supervisory Authority, or BaFin. Meanwhile, several countries, such as Greece, Hungary, Poland, Portugal, and Romania, have yet to approve any licenses.
To attract users from these newly unauthorized platforms, exchanges are presenting lucrative incentives. For instance, Erald Ghoos, CEO of OKX Europe, announced an 8% return on new deposits, urging users from competitors like Binance and Bybit to transfer their funds. Meanwhile, Coinbase CEO Brian Armstrong revealed that users transitioning to Coinbase can earn a 5% transfer bonus before July 13, approximately two weeks post-MiCA enforcement. Additionally, Kraken is running a promotional draw, offering $1.1 million in prizes for deposits made in euros.
These licensing requirements under MiCA mandate that crypto firms servicing users in the 27 EU member states must register as Crypto-Asset Service Providers (CASPs) with the appropriate regulatory body. The absence of several familiar exchanges could have a considerable impact on the EU’s cryptocurrency landscape, as many traders adjust to the newly regulated environment.
In the wake of these developments, Bybit has turned its attention to expanding its operations in the Middle East, even as it restricts its EU services. Derek Dai, the company’s head for the Middle East and North Africa, recently spoke at an event in Tel Aviv, highlighting Bybit’s strategic initiatives aimed at differentiating its marketing and operations in the MENA region. He noted the creation of halal investment products catering to more conservative investors in various Arabic nations, while also promoting derivative products that appeal to younger, emerging traders in markets like Morocco.
This shift underscores Bybit’s commitment to addressing the diverse needs of customers across different regions, ensuring that their marketing and business strategies are tailored accordingly, even as they navigate the regulatory landscape in Europe.
