Binance’s MiCA retreat in Greece exposes self-custody flight from EU exchanges

Binance has been approached by regulators inviting fresh licence applications following its abrupt withdrawal from Greece’s Markets in Crypto-Assets (MiCA) authorisation process, co-chief executive Richard Teng said this week, even as new data show most departing European users moved their assets into self-custody rather than to rival regulated exchanges.

Speaking at the Reuters NEXT Asia conference in Singapore on Thursday, Teng described the ongoing discussions with regulators as “premature” and declined to name the jurisdictions involved, according to Cointelegraph. The overture comes just weeks after Binance pulled its MiCA application in Greece on 24 June, amid reports that Greek authorities intended to reject the bid.

“It caught us by surprise because we submitted a fully compliant application. The regulators told us as much,” Teng said. “We are not quite sure why the approval kept being delayed. We withdrew the application because otherwise our users would have faced a very short transition period,” he added.

MiCA’s consumer-protection test

The episode lands at a sensitive moment for MiCA, the European Union’s single licensing regime for crypto-asset service providers. The bloc’s transition period lapsed on 1 July, after which the European Securities and Markets Authority confirmed that firms must serve EU clients through a MiCA-authorised entity, with only narrow carve-outs for unsolicited cross-border activity.

Teng used the platform to question whether the regime is delivering its intended consumer protections. He said that of the European users who withdrew funds from Binance following the Greek exit, the overwhelming majority moved into unregulated wallets rather than onto licensed rivals.

“Of the users in the EU [who] have subsequently withdrawn their funds out of our platform, 70% of those funds went to self-hosted wallets. Only 30% flowed to MiCA-regulated entities,” Teng said, arguing that self-custody wallets sit outside the very regulatory oversight MiCA was designed to extend.

Outflows and a rival’s gains

The scale of the exodus is reflected in on-chain flow data. Binance recorded $1.23 billion in net outflows during the week beginning 29 June, a 207% rise on roughly $400 million the previous week, according to DefiLlama figures reviewed by Cointelegraph.

The disruption has also sharpened competition among exchanges that already hold MiCA authorisation. OKX said its app downloads climbed 158% between 24 June and 5 July, citing Sensor Tower data, suggesting some displaced users did opt for a licensed alternative even if the majority did not.

Asian expansion continues

Away from Europe, Teng said Binance is continuing to broaden its regulatory footprint across Asia, pointing to operations in Japan, South Korea, Thailand, Indonesia and Australia, alongside a newly announced presence in the Philippines. “We have deployed in many places in Asia now… A few more are coming,” he said.

Binance’s re-entry into the Philippines runs through a partnership with BlockShoals Technologies, following restrictions imposed by local regulators in 2024. Neither Binance nor BlockShoals holds a licence from the Bangko Sentral ng Pilipinas to handle peso transfers or other central-bank-regulated virtual-asset services, with the arrangement instead relying on the jurisdiction of the Philippine Securities and Exchange Commission over trading activities.

For European policymakers, the divergence between Binance’s Asian expansion and its European retrenchment underscores the practical strain MiCA’s first full enforcement window is placing on both exchanges and users, with the self-custody data likely to feature in any review of the regime’s early effectiveness.

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