Binance CEO Richard Teng said about 70% of European user withdrawals following the exchange’s MiCA-related exit moved to self-custodied wallets rather than regulated rival platforms, adding a new dimension to the debate over Europe’s landmark crypto framework.
The figure, reported by Wu Blockchain and crypto-market outlets citing Teng, suggests that most affected users chose to move assets outside centralized exchanges instead of transferring balances to MiCA-authorized providers. Only about 30% of withdrawn funds reportedly went to regulated platforms. The data is company-supplied and has not been independently verified, but it is significant because Binance remains the world’s largest crypto exchange by trading volume and one of the most important gateways for European retail users.
The withdrawals followed Binance’s decision to withdraw its MiCA license application in Greece and pursue authorization in another European Union member state. Binance said on June 24 that users’ assets remained safe and accessible, but that some European users could be affected depending on country and account status. The company said it would communicate directly with affected users about next steps and available options.
The Financial Times reported that Binance told EU customers it would stop providing services from July 1 after failing to secure authorization before the Markets in Crypto-Assets Regulation deadline. Reuters later reported that Teng said Binance remains in close talks with EU regulators and continues to pursue authorization in the bloc.
Self-Custody Becomes the Default Exit Route
The reported withdrawal pattern highlights a difficult trade-off for European regulators. MiCA was designed to bring crypto-asset service providers under a harmonized licensing framework, improve consumer protection and reduce financial-crime risks. In theory, users leaving an unlicensed platform should migrate to authorized exchanges, brokers or custodians inside the EU perimeter.
Teng’s 70% figure points to a different outcome. If most users moved assets to self-custodied wallets, their funds may now sit outside the direct oversight of regulated service providers. Self-custody gives users control over private keys and reduces counterparty exposure to centralized exchanges, but it also shifts security, recovery, tax reporting and compliance responsibilities onto individuals.
For sophisticated users, self-custody can be a rational response. It avoids forced migration to a new exchange, preserves access to decentralized finance and allows users to wait until Binance receives fresh authorization. For less experienced users, however, the risks are higher. Mistyped addresses, lost seed phrases, phishing attacks and malicious wallet approvals can result in irreversible losses.
The move also complicates law-enforcement visibility. Centralized exchanges can freeze accounts, respond to legal requests and apply know-your-customer controls. Self-custodied wallets are transparent onchain but are not controlled by an intermediary, making intervention harder once assets move beyond an exchange.
MiCA’s Early Market Test
Binance’s EU disruption is one of the first major tests of MiCA’s ability to reshape market structure. The regulation requires crypto firms serving EU users to obtain authorization from a national regulator and then passport services across the bloc. Competitors including Coinbase, Kraken, OKX and Bitpanda have moved to secure MiCA or equivalent European permissions, creating an opening to capture displaced Binance users.
The reported withdrawal split suggests that the opportunity for regulated competitors may be smaller than expected. If users prefer wallets over rival exchanges, MiCA may reduce Binance’s direct EU footprint without automatically increasing activity on licensed platforms. That would weaken the regulatory objective of bringing more activity inside supervised channels.
For Binance, the data supports Teng’s argument that overly abrupt licensing disruption can push users away from regulated venues. The exchange has said it remains committed to Europe and will seek authorization in another EU member state. Its ability to regain access will determine whether self-custodied users eventually return to the platform or settle into a more decentralized trading and custody pattern.
The broader market impact is structural rather than price-driven. Binance’s exit did not immediately destabilize major crypto assets, but it shifted user behavior in a way that could matter for liquidity, compliance and exchange competition. Self-custody inflows may benefit wallet providers, decentralized exchanges and onchain applications, while regulated platforms may gain less market share than expected.
The episode shows that crypto regulation can produce second-order effects. MiCA may succeed in removing unlicensed firms from the EU market, but if users respond by moving assets outside custodial platforms entirely, regulators may face a harder challenge: supervising a market that is becoming more compliant at the institutional level while becoming more self-custodied at the user level.
