Binance says users in the European Union sent up to 70% of the funds they withdrew after July 1 to wallets they controlled themselves.
Only about 30% went to platforms regulated under the Markets in Crypto-Assets framework, according to Binance co-CEO Richard Teng.
The split was reported by the company, has not been independently audited, and came without the asset value, user count, measurement window, or tracking method needed to test it.
MiCA may not have backfired, but Binance’s figures point to an awkward outcome. Most departing funds appear to have bypassed regulated rivals and gone straight into users’ own wallets.
MiCA anticipated the self-custody route
The European Securities and Markets Authority told firms without authorization to execute wind-down plans when the transition ended July 1. Its guidance identified both a transfer to an authorized crypto-asset service provider and a self-hosted wallet as acceptable destinations.
MiCA can stop an unauthorized intermediary from serving EU clients, but it cannot require users to choose another custodian over holding their own keys. The cutoff pushed Binance out of the immediate custody relationship for those withdrawn assets while leaving users free to leave the regulated exchange layer altogether.
Binance is still pursuing an EU authorization route, Teng said after withdrawing its Greek application. A later approval could alter future flows, but it would not change where users sent funds during the cutoff.
Self-custody removes the exchange as a point of failure and gives users direct control. It also places key security, recovery and transaction responsibility on the user.
Teng argued that the shift can mean less customer support, fewer recovery options and less visibility for authorities than a large supervised platform provides.
Moving funds to a self-hosted wallet also does not make public-blockchain activity invisible. Authorities lose the ability to step in at the account level once funds leave a custodian, though they can still trace activity on-chain and run checks when those assets return to regulated services.
MiCA-authorized exchanges had offered incentives to attract customers leaving platforms that could no longer serve the bloc, as CryptoSlate reported before the cutoff. Binance’s reported 30% share for regulated destinations suggests authorization alone was not enough to win most of those balances.
Rivals may now need to compete on transfer simplicity, liquidity, product continuity and trust. Regulators have a different gap to close: the only outcome data in this case came from the departing company.
Standardized wind-down reports could show how much money reaches authorized platforms, self-hosted wallets or other destinations.
Without that evidence, the user-migration test can show that custody moved, but not whether MiCA reduced total risk or merely redistributed it.
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