70% of Binance EU Users' Assets Transferred to Self-Custody Wallets
Binance co-CEO Richard Teng revealed that after suspending services for some EU users, approximately 70% of user assets have flowed into self-custody wallets, with only 30% transferred to licensed platforms compliant with MiCA.
This data comes from Binance's proactive withdrawal and suspension of services due to the rejection of its MiCA license application in Greece. Teng pointed out that self-custody wallets are not subject to AML and KYC regulations, which may increase risks.
Market mechanisms show that user assets are flowing from regulated platforms to unregulated self-custody, indicating that the regulatory framework has failed to effectively guide funds to remain in compliant channels, putting pressure on platforms like Binance while benefiting self-custody service providers.
Source: Public Information
ABAB AI Insight
Binance has previously faced regulatory crackdowns in various regions, including lawsuits from the US CFTC and SEC, as well as license suspensions in multiple countries. Its historical approach shows a strategy of minimizing conflicts through proactive withdrawals and regional adjustments. The 70% outflow to self-custody in the EU is a direct result of its compliance strategy during the MiCA transition period.
In terms of capital flow, Richard Teng has clearly indicated a shift of resources towards Asia, having obtained licenses or permissions in Japan, South Korea, Thailand, Indonesia, Australia, India, and Pakistan. This localized strategy aims to capture growth in emerging markets to offset user and capital pressures resulting from restrictions in the EU.
Similar cases of users turning to self-custody on platforms like Coinbase under strict EU regulations, along with the rise of the self-custody narrative after the FTX collapse, indicate that Binance is currently in a control phase of transitioning from a globally unified platform to regionally compliant fragmentation in cryptocurrency exchanges.
This fundamentally reflects a restructuring of the industry chain triggered by regulatory changes: frameworks like MiCA attempt to centralize regulation but actually drive pricing power and user assets towards decentralized self-custody. This mechanism arises from the combined effects of rising compliance costs and user privacy preferences, leading to capital flowing from licensed platforms to unregulated tools.
ABAB News · Cognitive Laws
The stricter the regulation, the more funds flee to off-chain self-custody.
As compliance moats grow higher, self-custody becomes an escape route for users.
Platforms sell convenience, regulators sell control, and users ultimately choose freedom.