Richard Teng, co-CEO of Binance, says the EU’s MiCA rules are backfiring, with most departing users transferring funds to self-custody rather than licensed competitors.
Speaking at the Reuters NEXT Asia Summit in Singapore, Teng said 70% of funds withdrawn by affected EU users went into self-hosted wallets. Only 30% moved to platforms licensed under the new system.
Binance has withdrawn its MiCA offer before the July deadline
Binance stopped serving new EU clients on July 1 after withdrawing its MiCA license application in Greece in late June. Approval was repeatedly delayed without explanation, so the company withdrew to avoid a hasty transition for users, Teng said.
The exit forced existing customers to decide where to move their balances, and coincided with… Heaviest weekly flows In more than three years. Binance’s own data on those flows now supports Teng’s criticism.
The debate begins as European authorities examine how the rules work in practice, including… MiCA Nursery Review Opened this week. Analysts said that it is the implementation, not the text, that will be implemented The real test of the framework.
Teng warns that self-parenting carries greater risks
Teng, a former regulator, said the push by users toward self-hosted wallets undermines the protections MiCA was supposed to provide. Exchanges operate anti-money laundering (AML) procedures and Know Your Customer (KYC) checks that non-custodial wallets do not.
“Once it goes into a self-hosted wallet, the risks are literally magnified. You don’t have proper AML and KYC controls on those,” Richard Teng, co-CEO of Binance, said. He said.
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Regulators have more to gain by licensing compliant companies than by pushing activity beyond their sight, he said. Binance has since been invited to apply to other EU jurisdictions and says it remains committed to the region.
Supporters of autonomy read the same numbers differently. Keeping private keys removes counterparty risk exposed by previous exchange failures, and many users treat direct control as a core feature rather than a vulnerability.
Similar arguments have reached Washington, where Non-custodial wallet providers It asked US regulators to spare self-protection programs from old rules.
Regulatory bodies are also not oblivious to these transfers. Europe is expanding Encrypted travel base Exchanges already pay to collect data on transactions involving self-hosted wallets.
Whether the split reflects a temporary reaction to Binance’s exit or a permanent shift toward self-management will shape how regulators judge the first results of MiCA. Future licensing decisions should provide the first conclusive evidence.
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