Most funds leaving Binance in the EU went to self-custody, not rivals

Binance co-CEO @_RichardTeng has disclosed that the majority of funds withdrawn by European users following the exchange's MiCA licensing failure did not flow to regulated rivals. Instead, most went to self-hosted wallets, a finding that cuts to the heart of a growing debate over whether the EU's flagship crypto framework is working as intended.

Where the money went

According to Teng, of those who moved assets off the platform after the MiCA transition, roughly 70% transferred funds to self-hosted wallets, while only about 30% moved to MiCA-regulated platforms. Speaking at the Reuters NEXT Asia conference in Singapore on July 9, Teng questioned whether MiCA is meeting its consumer protection objectives, arguing that self-hosted wallets receive less regulatory oversight than licensed exchanges.

The broader withdrawal numbers underline the scale of the disruption. Binance recorded $1.23 billion in net outflows during the week beginning June 29, up 207% from roughly $400 million the previous week, according to DefiLlama data reviewed by Cointelegraph. The transition has also intensified competition among exchanges holding MiCA licenses, with OKX reporting that its app downloads rose 158% between June 24 and July 5.

The MiCA backstory

The comments follow Binance's withdrawal on June 24 of its MiCA application in Greece, submitted through the Hellenic Capital Market Commission, after reports that the regulator was poised to reject it before the July 1 deadline that reshaped the European market. After the bloc's transition period expired on July 1, the European Securities and Markets Authority said crypto firms must serve EU clients through a MiCA-authorized entity. Binance withdrew its application after reports surfaced that Greek regulators were planning to reject the exchange's licensing bid.

The self-custody migration figures give ammunition to critics who argue MiCA's hard cutoff had unintended consequences, though Binance's own regulatory history, including a $4.3 billion US settlement in 2023, is precisely why some European authorities have been cautious, and why compliant rivals like Coinbase and Ripple secured licenses while Binance did not.

Teng's argument is a direct challenge to Brussels: rather than steering users toward supervised venues, a strict licensing cutoff may have pushed them somewhere regulators have even less visibility. Binance is now exploring new licensing paths into Europe, with Teng confirming the exchange is in talks with regulators that have invited it to apply for licenses. He said at Reuters NEXT Asia that discussions remain "premature" and declined to identify the jurisdictions.

Cointelegraph: Regulators Invited Binance to Seek New Licenses After MiCA Setback
Euronews: Binance to Halt Crypto Services Across EU After Failing to Secure MiCA Approval
CoinDesk: Binance Says MiCA Should Be Judged by Who It Licenses, Not Who It Excludes