Europe’s landmark Markets in Crypto-Assets (MiCA) regulation is producing an unintended consequence: instead of channeling users toward supervised platforms, it is driving them to self-custody. Binance Co-CEO Richard Teng revealed that after the exchange suspended EU services on 1 July 2026, 70% of the withdrawn funds moved into private wallets, while only 30% reached other MiCA-licensed exchanges. The shift began after Binance withdrew its Greek MiCA license and halted EU deposits, as part of its compliance restructuring.
Teng warned that assets held in self-hosted wallets fall outside anti-money laundering (AML) and know-your-customer (KYC) controls, amplifying risks. “Once it goes into a self-hosted wallet, the risks actually amplify,” he said, noting that authorities lose the monitoring capabilities inherent in regulated platforms. The exodus challenges MiCA’s primary goal of improving consumer protection and market oversight, raising questions about whether tighter rules can achieve their aims without pushing activity into unregulated corners of the crypto ecosystem.
