Roughly 70% of funds withdrawn by European Union customers from Binance after the company suspended certain regional services were moved to self-custodied wallets, while about 30% went to platforms licensed under the bloc’s Markets in Crypto-Assets framework, according to figures shared by Binance co-CEO Richard Teng.
The figures, disclosed during Teng’s remarks at a summit in Singapore, offer a snapshot of how crypto traders responded after Binance stepped back from parts of its EU operation during the transition to the new regulatory regime that took effect on July 1. The shift suggests that many affected account holders chose direct control of their assets over moving immediately to another regulated trading platform.
Teng said the withdrawals followed Binance’s decision to suspend affected accounts after withdrawing a license application in Greece. He said the company had submitted a full application but faced delays in the approval process. Binance then chose to exit the process rather than keep account holders in an uncertain position as the new rules came into force.
The move came as MiCA began reshaping how crypto platforms, wallet services, token issuers and other digital asset businesses operate across the EU. The framework is designed to replace a patchwork of national registration systems with a single regulatory structure for crypto-asset service providers, known as CASPs. Firms that do not receive authorization under the new regime face limits on what services they can offer inside the bloc.
Teng said assets transferred to self-hosted wallets sit outside the same anti-money laundering and know-your-customer controls that apply to regulated platforms. In practice, that means a licensed exchange or broker must verify customers, monitor transactions and meet compliance standards, while a private wallet controlled directly by a trader is not itself a regulated business.
That distinction has become one of the most important issues in Europe’s crypto transition. Regulators want more oversight of platforms that handle customer funds, while many crypto users prefer self-custody because it reduces reliance on a centralized company. The Binance figures show how that divide can play out when a major platform withdraws services in a regulated market.
Binance says licensing talks continue in Europe
Teng said several European jurisdictions have since approached Binance to discuss possible local licensing opportunities. The company has not disclosed which countries are involved or whether it has submitted a new EU application.
Binance founder Changpeng Zhao previously said the company’s Greece application had been close to approval before unspecified external factors prompted a withdrawal. He also said Binance would look to file in another EU member state.
The company’s European position has been complicated by MiCA’s arrival and by earlier regulatory challenges in several countries. Before MiCA, crypto companies often sought registrations at the national level. Those registrations did not always carry the same standards, and they did not automatically allow a company to operate freely across the entire EU.
MiCA changes that structure. A company authorized as a crypto-asset service provider in one EU member state can, in principle, use that approval to serve customers across the broader bloc through passporting rights. That makes the choice of licensing jurisdiction strategically important for large platforms.
For traders, the practical effect is simple: platforms that fail to obtain approval may be forced to suspend services, restrict accounts or transfer operations. That is why the July 1 deadline became a key moment for firms still waiting for approval or deciding whether to continue in the EU.
Self-custody gains attention after service suspensions
The largest part of the Binance withdrawals went to self-custodied wallets, according to Teng’s figures. These wallets allow traders to hold their own private keys rather than keeping assets with a platform. In crypto, control of the private key generally determines control of the funds.
Self-custody can take several forms. Some traders use software wallets on phones or computers. Others use hardware wallets, which store private keys on physical devices that can be kept offline. The appeal is that funds are not dependent on a trading platform’s solvency, licensing status, account policies or withdrawal controls.
The trade-off is responsibility. If a trader loses access to a private key or seed phrase, there may be no recovery process. If a wallet is compromised by malware, phishing or poor storage practices, assets can be stolen. Unlike a bank account, a blockchain transfer is usually final.
The move toward self-custody also creates a challenge for regulators. A regulated platform can be required to identify customers, screen transactions and report suspicious activity. A private wallet, by contrast, is simply a tool controlled by an individual. Regulators can monitor activity on public blockchains, but they cannot apply the same compliance duties to a private wallet that they apply to a licensed business.
That gap is not new, but it becomes more visible when a large number of platform customers move funds into private storage. For European authorities, the central policy question is how to balance financial crime controls with the right of individuals to hold digital assets directly.
Licensed platforms receive part of the outflow
About 30% of the funds withdrawn from Binance’s affected EU accounts moved to MiCA-compliant platforms, Teng said. That portion highlights a different response from traders who wanted to remain inside a regulated environment rather than take on the operational burden of self-custody.
For these traders, a licensed platform may offer simpler access to trading, fiat deposits, tax reports and customer support. It may also reduce the risk of sudden service suspensions tied to regulatory approval. Under MiCA, licensed platforms must meet standards on governance, capital, safeguarding of client assets, complaint handling and market conduct.
The new regime is expected to raise the cost of operating in Europe. Smaller firms may struggle with compliance staff, legal costs, reporting systems and capital requirements. Larger firms may have more resources, but they still need regulatory approval and ongoing supervision.
The result is likely to be a smaller but more regulated market. Public registry data cited in industry discussions suggests that only a fraction of firms previously operating under older national registration systems have secured authorization under the new framework. The supplied figures indicate that, out of roughly 3,167 older registered regional firms, about 244 had obtained new licenses.
That consolidation may make the market easier to supervise, but it also reduces the number of available platforms for traders. Some customers may welcome a higher compliance bar. Others may see fewer choices and higher costs.
Abu Dhabi supervision remains central to Binance
Teng said Binance remains under continuous supervision by the Abu Dhabi Financial Services Regulatory Authority. He said that oversight covers governance, anti-money-laundering compliance, transaction screening, token listing reviews and digital wallet management.
The Abu Dhabi framework has become an important part of Binance’s global regulatory posture. The company has spent recent years seeking local approvals in multiple regions after facing scrutiny in major markets. Its strategy has shifted from operating through global access points toward obtaining country-by-country licenses and partnerships.
Teng said Binance currently holds licenses in Japan, South Korea, Thailand, Indonesia, Australia, India and Pakistan. He also said the company has launched operations in the Philippines through a regional partnership and is pursuing additional licensing efforts across Asia.
The company remains one of the world’s largest crypto platforms by user count. Teng said Binance serves about 323 million users globally, out of an estimated 740 million people engaged with digital assets worldwide. Those figures were presented by Binance and have not been independently verified in the remarks.
The scale matters because any change in Binance’s regional access can affect a large number of traders. When a platform with hundreds of millions of accounts changes its service availability, funds may move quickly across private wallets, regulated platforms and other parts of the crypto market.
Stablecoin rules add another layer of pressure
MiCA’s impact is not limited to trading platforms. The rules also affect stablecoins, including tokens linked to major currencies such as the U.S. dollar and the euro.
The EU framework treats stablecoin issuers as regulated entities, with requirements covering reserves, redemptions, disclosures and supervision. For large or widely used tokens, reserve rules can be especially important. Some provisions require a portion of backing assets to be held with credit institutions, creating conflict with issuers that prefer different reserve structures.
This has already changed which tokens are available on some European platforms. The most widely used dollar-linked token, Tether’s USDT, has faced restrictions or removals from certain local platforms because of MiCA-related concerns. Tether CEO Paolo Ardoino has criticized elements of the framework, including requirements tied to holding reserves in standard banks.
For traders, the practical issue is liquidity. A token that remains widely used globally may become harder to buy, sell or trade on EU-compliant platforms if it does not meet local requirements. That can create price differences, limited trading pairs or delays when traders try to move between tokens and fiat currencies.
At the same time, regulated euro-pegged tokens have gained attention. Public market data shows that the approved euro-pegged token sector has expanded, with total market size recently rising above $673 million. While still small compared with U.S. dollar-linked tokens, the growth reflects demand for digital assets that fit more cleanly inside the European regulatory framework.
The shift may also encourage more euro-denominated crypto activity. For years, the digital asset market has been dominated by dollar-linked tokens. MiCA could give euro-pegged tokens a clearer regulatory path, though adoption will depend on liquidity, platform support, issuer credibility and ease of redemption.
Account checks and tax records become more important
Transfers between private wallets and regulated platforms are likely to receive closer scrutiny under the new environment. When funds move from a self-hosted wallet to a licensed service provider, the platform may ask for information about the source of funds, wallet ownership or transaction history.
This does not mean every transfer will be blocked. It does mean traders should expect more questions than they may have faced under older registration systems. Platforms operating under MiCA and related anti-money-laundering rules have strong incentives to document customer activity and avoid high-risk flows.
Clear records are becoming more important. Traders who move assets between self-custody and licensed platforms may need to show when assets were acquired, where they were held, and whether any taxable events occurred. Tax rules differ by country, but regulators across Europe are increasing their focus on digital asset reporting.
The same applies to identity checks. A trader who withdraws to a private wallet and later sends funds back to a regulated platform may be asked to prove control of that wallet. Some platforms may use cryptographic messages, small test transfers or documentation requests to confirm ownership.
For active traders, the process can become complex if funds move through multiple wallets, decentralized protocols or cross-chain bridges. Missing records can create problems during account reviews, tax filings or audits.
A sharper divide in Europe’s crypto market
The Binance withdrawal figures point to a sharper divide in the European crypto market after MiCA. One group of traders is moving closer to regulated platforms, accepting more oversight in exchange for clearer legal status and access to compliant services. Another group is moving deeper into self-custody, prioritizing control and independence from platform decisions.
Both choices carry risks. Regulated platforms can face outages, compliance freezes, fees and changing asset listings. Self-custody can expose traders to key loss, scams and operational mistakes. The best choice depends on a trader’s technical ability, risk tolerance and need for trading access.
What is clear is that the July 1 transition has changed behavior. Binance’s reported outflow split shows that regulatory action does not simply move customers from one platform to another. It can also push a large share of funds outside the regulated platform system entirely.
For European policymakers, that outcome will be closely watched. MiCA was designed to bring order, transparency and accountability to the crypto market. But if strict rules cause more traders to hold assets privately, regulators may gain stronger control over licensed firms while losing visibility over a larger pool of self-custodied funds.
For crypto companies, the lesson is equally direct. Licensing is no longer a secondary issue in Europe. It is now central to market access, customer retention and long-term operations. Platforms that secure approval can continue serving traders across the region. Those that do not may face suspensions, withdrawals and a rapid loss of customer balances.
For traders, the immediate task is to understand where their assets are held and whether the services they use are authorized under the new rules. The European market is not closing, but it is becoming more selective. The companies that remain will be more heavily supervised, and the customers who leave them for private wallets will carry more responsibility for protecting their own funds.
Concerned about EU regulation and custody? Learn how to secure your assets with proper crypto storage choices today.
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