Binance Users Flock to Self-Custody Wallets Amid EU Regulatory Friction

Binance Co-CEO Richard Teng recently shared some striking numbers regarding EU withdrawals from the platform. Following Binance's pause of EU services, 70% of funds withdrawn by European users landed in self-hosted wallets, while only 30% moved to other MiCA-compliant platforms.

The numbers come after Binance pulled its Markets in Crypto-Assets (MiCA) license application in Greece on June 24, citing approval delays. The EU's transition period for MiCA compliance ended on July 1, prompting European users to withdraw their funds from the platform.

Net outflows from Binance hit $1.23 billion during the week beginning June 29, a 207% increase from the prior week. This substantial chunk of capital exiting one platform was driven entirely by regulatory friction rather than market panic or a security breach.

Teng cautioned that the migration toward self-custody wallets could undermine the very consumer protection objectives that MiCA was built to achieve. Self-hosted wallets operate with significantly less regulatory oversight compared to licensed platforms.