Binance CEO Richard Teng stated that the European Union's new MiCA regulation has produced the exact opposite result than intended. Instead of placing the crypto market under strict control, the rules have triggered a mass exodus of funds from licensed platforms into an unregulated environment.
Speaking at the Reuters NEXT Asia summit in Singapore, Teng cited telling statistics: 70% of the funds that users withdrew from the European Union after Binance's departure ended up on personal non-custodial wallets. Only 30% of clients transferred assets to platforms that had obtained licenses under the new regulation. These figures are an alarming signal for European regulators.
Why did Binance leave Europe?
As a reminder, Binance stopped registering new clients from the EU on July 1, and at the end of June officially withdrew its application for a MiCA license in Greece. As Teng explained, the local regulator indefinitely delayed document approval without explanation. The exchange's management decided to leave voluntarily to avoid creating chaos for users during a forced transition.
Binance's departure coincided with the largest weekly capital outflow from the platform in the last three years. The exchange's internal statistics on the movement of these assets formed the basis of Teng's criticism.
Decentralization as a threat to control
Teng, who has experience working in regulatory bodies, expressed serious concern. He emphasized that the forced migration of users to self-custody completely nullifies MiCA's protective mechanisms. Large centralized exchanges conduct rigorous Anti-Money Laundering (AML) and Know Your Customer (KYC) checks. Decentralized software solutions simply cannot provide such control.
"When funds are transferred to a personal wallet, risks only increase. There are no real AML and KYC procedures there," explained Binance co-executive director Richard Teng.
According to Teng's firm belief, it is more sensible for officials to issue licenses to large companies willing to undergo regulation. This approach is far more effective than deliberately pushing crypto activity beyond the state's oversight. Binance separately emphasized that the company has already received offers to submit documents in other EU countries. The brand does not plan to leave the European market permanently.
The paradox of regulation
Supporters of self-custodial crypto storage view these figures entirely differently. Personal management of private keys allows investors to completely avoid risks associated with the sudden collapse of centralized exchanges. For many experienced users, strict control over their own money is a mandatory condition of operation, not a legal loophole.
Similar debates are ongoing in the US, where developers of non-custodial wallets are asking regulators to exempt such services from requirements applicable to traditional financial institutions.
Government agencies are also closely monitoring such transfers. In Europe, requirements for the crypto "Travel rule" are gradually tightening. As a result, exchanges are now obligated to collect detailed data on all transactions involving non-custodial wallets. It remains unclear whether the mass shift to self-custodial storage is limited to the current user outflow.
Expert opinion: MiCA, designed as an investor protection tool, is in practice turning into a catalyst for decentralization. Regulators should consider: the stricter the framework, the greater the incentive to circumvent it. Perhaps the future lies in "soft" regulation that does not push businesses into the gray zone but offers flexible conditions for cooperation.