Binance EU withdrawals reveal a striking regulatory twist, with Richard Teng saying 70% of withdrawn funds moved to self-hosted wallets rather than MiCA-regulated platforms.
Europe built MiCA to bring crypto users into a safer, regulated environment. According to Binance co-CEO Richard Teng, many users apparently read the memo and walked in the opposite direction.
Speaking at the Reuters NEXT Asia event in Singapore, Teng said 70% of funds withdrawn by EU users from Binance went to self-hosted wallets. Only 30% reportedly moved to MiCA-regulated entities. If accurate, that is an inconvenient result for a framework designed partly to improve consumer protection.
Binance EU Withdrawals Put MiCA’s Real-World Impact Under the Spotlight
The development follows Binance’s withdrawal of its MiCA licence application in Greece. The exchange has maintained that it remains committed to the European market and is in discussions with regulators about securing authorization elsewhere in the bloc.
MiCA requires crypto firms serving EU customers to operate under the new regulatory framework. Binance, however, did not secure the required authorization before the deadline, creating uncertainty for its European operations.
And here comes the regulatory plot twist.
Instead of neatly moving their assets from one supervised platform to another, many users reportedly chose self-custody. In simple terms, users preferred holding their own crypto keys rather than handing their assets to another regulated exchange.
That does not automatically make self-hosted wallets unsafe. Self-custody gives users direct control over their assets and remains a core principle of crypto. However, it also removes many protections and oversight mechanisms associated with regulated platforms. Lose the private keys, and there is no customer-support desk performing miracles.
Teng has used the 70% figure to question whether MiCA’s implementation is producing its intended consumer-protection outcome. The statistic, however, comes from Binance and should be understood as the company’s account of withdrawal flows.
The broader issue is now clear: regulation can control licensed platforms, but it cannot force users to choose them.
MiCA may still strengthen Europe’s crypto market over time. Yet the early Binance withdrawal data suggests that when regulators close one door, crypto users may simply open a self-hosted wallet.
For Europe, the lesson is mildly awkward: building a regulatory safety net is one thing. Convincing people to stand over it is another.
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