MiCA Regulation Explained: What ByBit’s EU License Means for You

If you use crypto in Europe, there are new rules you’ll need to follow. ByBit was recently granted an EU license under the MiCA framework. This means crypto use in the EU is becoming more transparent — but also more centralized. For example, you’ll need to complete KYC verification and report any transactions over €1000. Unfortunately, that’s not all.

What Has Happened? ByBit Gets MiCA Approval

Crypto exchange Bybit became one of the first major platforms to be licensed under the EU Markets in Crypto-Assets (MiCA) regulation in 2025. The license was issued by the Austrian regulator (FMA) and allows Bybit to legally serve clients in almost all countries of the European Economic Area (EEA) — that’s about 29 countries.

Thanks to MiCA, instead of disparate national rules, Europe now has a unified regulatory framework for the crypto industry.

“Securing the MiCAR license in Austria is a testament to our compliance-first approach at Bybit,” stated Ben Zhou, co-founder and CEO of Bybit. “We are actively collaborating with regulators and pursuing licenses globally to ensure our users can access our innovative platform with the highest levels of regulatory and compliance assurance.”

Bybit has moved its European headquarters to Vienna and plans to hire over 100 employees there. Other companies licensed under MiCA include Kraken, OKX, Crypto.com, and even traditional banks like BBVA and Clearstream — Europe is forming a new crypto hub.

What Does It Mean for European Users?

MiCA was conceived precisely to increase confidence in the market: as noted by Swedish Finance Minister Elisabeth Svantesson, recent events have confirmed the need for rules that will protect European investors and prevent crypto-assets from being used for money laundering and terrorist financing.

For European users, this development means Bybit will operate under the oversight of European regulators and adhere to strict standards of investor protection, transparency, and anti-money laundering compliance.

Keep in mind: Bybit does not serve U.S. citizens or residents due to regulatory restrictions. Moreover, Mainland China, Hong Kong, Singapore, Canada, France, the United Kingdom, North Korea, Cuba, Iran, Uzbekistan, and Russian-controlled regions of Ukraine are also restricted.

What's Next for You?

Below, we’ll explain several important new rules that change how you use crypto in the EU.

Legal Status and Passporting of Services

Previously, exchanges had to navigate the disparate requirements of different EU countries. Now, Bybit — through its Austrian license — can passport its services to all EEA countries without needing to register in each one separately.

In other words, European users no longer need to worry that their Bybit account could suddenly become non-compliant in their country. In France, for example, Bybit was previously blacklisted by the regulator (AMF) for lacking a local license, and authorities warned investors against using the platform.

Mandatory Identification (KYC) and AML Compliance

MiCA requires licensed firms to strictly comply with anti-money laundering and anti-terrorist financing (AML) regulations.

For users, this means that identity verification (KYC) will be mandatory for all users. While Bybit used to allow limited trading without KYC (for example, there were reports that prior to licensing, the exchange allowed withdrawals of up to $20k per day without verification), such loopholes are likely to be closed now.

All European Clients Must Be Uniquely Identified

Each account on Bybit EU will be linked to real user data — including name, address, and ID documents. This eliminates the possibility of creating an account under a pseudonym or from another country without detection. Moreover, Bybit will have a legal obligation to store your personal data and share it with regulators upon request (e.g., financial intelligence units during investigations). Anonymous users will no longer be allowed on the platform.

Transparency and Informing

According to surveys, more than 60% of investors expect MiCA to increase transparency and reduce fraud in the market. As a result, exchanges must enhance operational transparency and clearly inform customers about risks.

Users are expected to receive detailed documentation about the services provided and the crypto assets offered. For example, if new tokens are listed on the platform, crypto white papers with asset disclosures must be published. Standards covering conflicts of interest, complaint handling procedures, commission transparency, and more are also being implemented. All of this is aimed at protecting consumer rights and building trust.

Anonymous Trading or Withdrawals on Bybit EU Will No Longer Be Allowed

This means identity and proof of residence will be required when registering as an EEA resident. Moreover, every transaction will be subject to AML compliance oversight: MiCA requires providers to comply with the Travel Rule — collecting and transmitting sender and recipient information for transfers over €1,000.

Even off-exchange transactions (such as transferring cryptocurrency to an external wallet) can now be monitored. In parallel with MiCA, the EU has introduced updated Transfer of Funds Regulations, which also apply to cryptocurrencies.

For example, if a user withdraws funds from Bybit EU to an external wallet, the platform must verify ownership of the wallet for amounts over €1,000. For transfers between organizations, it must exchange customer data with the counterparty. Thus, every significant transfer will involve some level of personal data disclosure, reducing user anonymity.

If you withdraw to your own wallet, Bybit may request proof that the wallet belongs to you (e.g., by signing a message with a private key) and record your data in connection with that address.

Sender and Recipient Disclosure

If you transfer funds between different platforms, both parties will share identity information. Let's say you send 5 BTC from Bybit EU to a friend's account on another exchange in Europe — your name, address, and other details will be shared with that exchange as part of the transfer. And vice versa: when receiving funds from abroad, Bybit will require sender information as well.

The Travel Rule — an international FATF standard — sets a threshold of approximately $1,000 and is already being implemented worldwide. In the EU, the €1,000 threshold is fixed. In the U.S., it's currently $3,000, though a reduction to $250 is under discussion. As a result, any large transaction will be accompanied by a kind of “digital passport” containing identity data. This requirement can only be avoided with smaller transactions below €1,000 — but regularly splitting up amounts to stay under the limit may raise red flags (similar to “structuring” in financial monitoring).

As a result, any large transaction will be accompanied by a “digital passport” of identity. This can only be completely avoided for transactions under €1,000, but repeatedly splitting amounts to stay below the threshold may raise suspicions (similar to “structuring” in financial monitoring).

New Rules for Stablecoins

A separate MiCA innovation concerns stablecoins — specifically electronic money tokens (EMTs) and asset-linked tokens (ALTs). By the end of the first quarter of 2025, all stablecoins not approved by EU regulators must be removed from circulation on licensed platforms.

This has already led to important changes for users. Tether (USDT), the largest stablecoin, has started being phased out in Europe. Coinbase and Kraken removed USDT and several other tokens — including DAI — between December 2024 and January 2025 to comply with MiCA. Bybit is likely to follow suit: USDT trading will no longer be allowed without proper authorization.

Instead, MiCA-compliant stablecoins that have already received EU approval are emerging. For example, in April 2025, Bybit announced support for new MiCA-compliant stablecoins — USDQ, EURQ, and EURD — issued by fintech company Quantoz. These tokens are specifically designed to meet MiCA requirements and appear to be intended as replacements for USDT and USDC on the European platform.

For users, this means that familiar stablecoins may be temporarily removed or limited to withdrawals only, and users will have to convert their funds into new euro- or dollar-linked tokens that comply with EU regulations. Tether has publicly criticized such a hasty transition, saying that “ill-designed actions” by regulators could destabilize the market and create risks for consumers.

In general, MiCA does not directly prohibit privacy-focused technologies, but it indirectly discourages their use. For example, privacy coins like Monero and Zcash are not explicitly mentioned in the regulation, but EU exchanges often delist them because their transactions can't be traced. Many European platforms have already removed Monero (XMR) and similar coins.

Risk Insurance and Liability

Although MiCA does not directly impose mandatory deposit insurance, having a license means that users in Europe are legally better protected. For example, they have access to legal recourse through European courts and can file complaints with national supervisory authorities — in the case of Bybit, with Austria’s Financial Market Authority (FMA) — or with EU-level consumer protection bodies.

Tax Questions

The regulatory changes also affect the tax implications of owning and trading cryptocurrency, although MiCA itself does not impose tax rates or introduce new taxes. Instead, it standardizes the market, making it easier for tax authorities to monitor citizens’ crypto-assets.

Data Exchange with Tax Authorities (DAC8)

In parallel with MiCA, the EU is preparing to implement the DAC8 directive, which extends automatic financial information exchange to include cryptoassets. EU member states must adopt the directive by the end of 2025, with the first reporting period beginning in 2026.

Practically speaking, this means that exchanges and other service providers will be required to report all crypto-asset transactions of their clients to tax authorities. These reports will include purchases, sales, exchanges, transfers, and account balances.

In fact, crypto exchanges will become just as much a source of tax information as banks or brokers. The goal is to prevent tax evasion and promote transparency around income. For Bybit users in Europe, this means it will become nearly impossible to hide income from tax authorities — any significant transaction will eventually be reported through the automated system.

For example, if you sell a bitcoin on Bybit at a profit, this information will be reported to your tax authority by 2027 (covering transactions from 2026). Therefore, it’s important to consider the tax implications of each transaction in advance and be prepared to report your crypto income.

That is, crypto transactions are no longer “invisible” to tax authorities — this is becoming the global trend.

Coin Wallet’s Position

MiCA primarily applies to custodial platforms such as centralized exchanges, but it may also impact other types of wallets. Coin Wallet remains outside the scope of MiCA, as it does not store user funds or process transactions on behalf of users.

However, the EU is considering extending regulations to self-custodial wallets as well — future changes may affect how private keys are stored or how wallets interact with exchanges.

If government agencies request information from Coin Wallet, the platform will respond to valid law enforcement requests. Each request is reviewed to ensure it has a valid legal basis and that any response is limited to the data specifically requested. Coin Wallet also reserves the right to make disclosures to authorities in order to protect the platform and its users.

Coin Wallet only accepts such requests when sent from official government email domains.