Binance CEO Richard Teng sharply criticized the European MiCA regulation, stating that the new rules are having the opposite effect. Instead of strengthening control over the crypto market, they are forcing users into an unregulated zone — self-custody of assets.
Speaking at the Reuters NEXT Asia summit in Singapore, Teng cited telling statistics: 70% of all funds withdrawn by users from Binance after it ceased servicing EU clients ended up in personal wallets. Only 30% moved to platforms that have already obtained a MiCA license. This is direct evidence that the regulation is not so much protecting as it is repelling market participants.
Why did Binance leave Europe?
Recall that Binance officially withdrew its application for a MiCA license in Greece back in late June. The reason was systematic delays by the local regulator, which postponed document approval without explanation. To avoid causing additional stress for users, management decided to leave voluntarily. This move coincided with the largest weekly capital outflow from the exchange in the last three years.
Currently, European officials are actively assessing the effectiveness of the new requirements in practice. This week, for example, an inspection of custodial service regulation under MiCA rules began. However, the key test will be not so much the law itself, but the specifics of its application.
Self-custody: risk or freedom?
Teng, who has experience working in regulatory bodies, highlights a paradox: when assets move to personal wallets, MiCA mechanisms are completely nullified. Large centralized exchanges conduct strict AML and KYC checks, while decentralized solutions cannot provide such control. "Risks only increase," he concludes.
However, proponents of self-custody see it differently. For many experienced users, full control over private keys is not a loophole, but a fundamental principle of working with cryptocurrencies. The rigid framework of MiCA, in their opinion, only pushes towards decentralization, which in the long term could weaken the influence of regulators.
Expert opinion (Cryptalist): The situation demonstrates a classic conflict between the desire for order and the decentralized nature of cryptocurrencies. MiCA, conceived as a protection tool, risks becoming a catalyst for a mass exodus into the shadows. Regulators should consider: isn't it easier to issue licenses to major players willing to comply with the rules, rather than driving them out of the market and losing control over capital flows?