Most funds withdrawn by Binance's european users following the exchange's EU service suspension were transferred to self-custodied wallets rather than rival MiCA-regulated exchanges, according to figures shared by Binance co-CEO Richard Teng. He said about 70% moved to self-custody while the remaining 30% went to licensed platforms.
Speaking at the Reuters NEXT Asia summit in Singapore on Thursday, Teng argued the figures raise questions about whether MiCA is serving its intended purpose of reducing risk for users. He noted that assets moved to self-hosted wallets fall outside the oversight, anti-money laundering, and know-your-customer controls that apply to regulated exchanges.
"Does the MiCA regime then serve its purpose to make sure that you minimize risk for the users because once it goes into self-hosted wallet, the risk actually amplified," Teng said.
Binance suspended services for affected EU users after withdrawing its MiCA license application in Greece ahead of the bloc's licensing transition deadline on July 1. Teng said the exchange pulled the application after approval delays despite submitting what it believed was a fully compliant filing, arguing that the decision was made to avoid leaving users with a short transition period.
