Binance Users Flee to Unregulated Wallets Amid MiCA Regulatory Uncertainty

Binance CEO Richard Teng has expressed doubts about the effectiveness of the EU's crypto regulatory regime, MiCA. In an interview with Reuters, he highlighted that 70% of funds withdrawn from Binance by EU users ended up in unregulated self-hosted wallets.

Teng questioned whether MiCA can serve its purpose of minimizing risks for users, as the majority of funds are not being held in regulated entities. He noted that once funds go to self-hosted wallets, the risk amplifies due to a lack of oversight and anti-money laundering controls.

CryptoQuant data showed that stablecoin withdrawals intensified last month, with USDC reserves on Binance falling by 21% from over $6B to about $4.47B. This represents nearly $2B in outflows, which CryptoQuant called 'regulated capital flight.'