Binance, the world’s largest cryptocurrency exchange by trading volume, recently reported a significant shift in user funds among its European customers. Co-CEO Richard Teng stated at the Reuters NEXT Asia conference in Singapore that 70% of assets withdrawn by Binance’s EU users were transferred to self-custody wallets following the company’s suspension of most European services on July 1. Only 30% of the withdrawn funds moved to platforms compliant with the European Union’s Markets in Crypto-Assets (MiCA) regulation.
Debate over MiCA’s user impact
The pattern of asset migration has reignited questions about the practical effects of the EU’s new regulatory regime for digital assets. Some observers argue that stricter rules risk pushing users away from regulated exchanges and toward less visible alternatives outside government oversight.
Teng raised concerns about MiCA’s influence, arguing that the rapid growth in self-custody could limit regulators’ ability to monitor transactions and enforce compliance measures. He emphasized that a substantial portion of users appear to be transacting “outside the regulated perimeter.”
Users simply move their activity to other channels, many of which operate outside regulatory oversight, making it harder for authorities to maintain transactional visibility and enforce market rules.
Unlike centralized exchanges, self-custody wallets allow individuals to control their private keys, independent of any intermediary. Although self-custody is considered a core principle of crypto ownership, these wallets generally fall outside anti-money laundering (AML) and know-your-customer (KYC) systems imposed on regulated platforms.
As a result, Teng said migration to self-custody could undermine the goals of transparency and oversight sought by new frameworks like MiCA.
Mini dictionary: MiCA (Markets in Crypto-Assets) is a regulatory framework introduced by the European Union to regulate crypto asset service providers, aiming for harmonized digital asset oversight across EU member states.
Binance sees record European outflows
During the transition week around July 1, Binance experienced net customer outflows of $1.23 billion in Europe. This marked its most significant week of withdrawals across the continent in more than three years, according to Teng.
The surge followed Binance’s withdrawal of its MiCA license application in Greece, after pending approval did not arrive before the new compliance deadline. Without the necessary authorization under MiCA, Binance suspended nearly all services for affected European users.
Under the MiCA framework, crypto service providers must register with at least one EU jurisdiction to offer services across the bloc. The lack of timely approval left Binance unable to legally continue operations for many customers in the region.
| Destination | Percentage of Outflows |
|---|---|
| Self-custody wallets | 70% |
| Other MiCA-regulated exchanges | 30% |
Teng acknowledged that the company had worked extensively with European regulators and expected a different result. He noted that delays in the approval process created uncertainty for users and led Binance to carry out an orderly exit from certain markets.
The week of the MiCA transition brought the heaviest customer withdrawals Binance has seen in Europe since 2023, totaling $1.23 billion in net outflows as users responded to the new regulatory landscape.
Binance eyes new EU licenses as Asia expansion continues
Despite the regulatory challenges, Teng stated that Binance remains committed to the European market. He confirmed that multiple EU member states have invited the exchange to apply for new licenses, although he did not specify which countries extended the offers.
Binance, established in 2017, operates global crypto trading services and has become a major player due to its broad selection of assets and high liquidity. Teng, who was promoted to Co-CEO in 2023, now leads the company’s strategy through industry shifts and compliance hurdles.
While pursuing a return to the EU, Binance is also accelerating expansion in Asia. The company recently launched operations in the Philippines through a local partnership and is seeking additional licenses across the region.
Teng reported that Binance currently serves about 323 million users worldwide, maintaining its global leadership despite regulatory roadblocks in some markets.
These dual strategies showcase Binance’s approach to navigating evolving rules in different jurisdictions, while the effectiveness and future impact of the MiCA regime continues to spark debate within the industry.
