Law enforcement tells us there's just not enough evidence to prove what happened during the December crash in Hollywood ... despite a video showing Michael racing another driver -- also in a Ferrari -- moments before Michael careened into a parked KIA.

Cops say the video is part of the puzzle of what happened during the accident, but it's not enough to complete it -- especially as it doesn't capture whether MBJ was behind the wheel.

If a crime had been committed, we're told it would be street racing, and because that's a misdemeanor ... an officer would need to witness Jordan driving. That didn't happen as cops only responded after the fact.

Ditto for speeding -- we're told it isn't clear from the vid just how fast Michael's car was going as he apparently raced the other down Sunset Blvd.

So, when you put it all together ... just too many question marks to prosecute.