Binance CEO Says MiCA Is Backfiring as EU Users Move Beyond Regulators' Reach

What happened

Binance co-CEO Richard Teng says the EU's Markets in Crypto-Assets (MiCA) rules are backfiring, with most departing users moving funds into self-custody rather than to licensed rivals. Speaking at the Reuters NEXT Asia summit in Singapore, Teng said 70% of funds withdrawn by affected EU users went to self-hosted wallets. Only 30% moved to platforms licensed under the new regime. Binance Withdrew its MiCA Bid Before the July Deadline Binance stopped serving new EU customers on July 1 after pulling its MiCA license application in Greece in late June

Confirmed

Global impact / market context

If many users avoid licensed platforms, the EU’s goal of safer crypto markets may be undermined, and firms could see lower revenue from EU customers while facing higher compliance costs.

Confirmed

The EU introduced MiCA, a set of rules that require crypto platforms to obtain licenses and keep user assets in custodial accounts. The regulation aims to protect investors but also adds compliance costs for firms.

Confirmed

What to watch

1. Whether other crypto exchanges will follow Binance’s lead and stop seeking MiCA licenses, potentially reducing competition among licensed providers in the EU. Analyst inference
2. Growth of self‑custody solutions as more EU users move funds to personal wallets, which could boost demand for hardware wallets and non‑custodial services. Analyst inference
3. Regulators’ response to the shift, such as possible adjustments to MiCA rules or new guidance aimed at discouraging mass withdrawals to self‑custody. Proposed

Evidence

• beincrypto.com