Speaking at the Reuters NEXT Asia summit in Singapore, Teng disclosed that 70% of funds withdrawn by EU users after Binance's service suspension moved into self-custody wallets, where users hold their own private keys. Only 30% migrated to exchanges that hold a MiCA license. The disclosure transforms a disputed licensing withdrawal into a pointed challenge for regulators worldwide: stricter licensing frameworks may not pull crypto activity into regulated channels. They may push it out entirely.

What Happened and Why

Binance withdrew its MiCA license application in Greece on June 24, 2026, days before the EU's July 1 enforcement deadline. Reports indicated the withdrawal followed concerns that co-founder Changpeng Zhao, who pleaded guilty to anti-money laundering violations in the United States in 2023, would not pass MiCA's fitness and propriety requirements for company owners and senior managers. Binance disputed that characterization, with Teng describing the exchange's application as "fully compliant" and calling the Greek regulator's handling "surprising."

From July 1 onward, users in France, Italy, Spain, Poland, and several other EU member states lost access to Binance's spot trading, margin trading, earn products, and new deposits. Existing account holders can only close positions and withdraw funds. MiCA (Markets in Crypto-Assets Regulation) is the EU's first bloc-wide crypto licensing regime; exchanges that secure authorization from one national regulator can operate across all 27 member states. Binance serves approximately 323 million users globally, a scale that makes even a regional suspension consequential for the broader market. Of more than 1,200 firms that previously operated under transitional national frameworks, only roughly 210 to 244 secured full MiCA authorization before the deadline, a pass rate of approximately 17 to 20%. The European Securities and Markets Authority confirmed there would be no extension of the transitional period, meaning firms like Binance could not simply delay their applications.

The On-Chain Evidence

The outflows that followed were substantial. DefiLlama data shows Binance recorded $1.23 billion in net outflows during the week of June 29, a 207% surge from roughly $400 million the prior week. Monthly cumulative outflows reached approximately $3.2 billion. On-chain analytics firm CryptoQuant recorded more than 166,000 Ether withdrawn from Binance in a single day, the highest figure since March 2023. BNB, Binance's native token, was trading at approximately $574.78 at the time of Teng's public remarks, down 0.4% over 24 hours, noted here as a general market reference point rather than a direct indicator of outflow impact.

Self-custody wallets sit entirely outside MiCA's regulatory perimeter. Once assets move to a self-hosted wallet, the KYC checks, transaction monitoring, and consumer protections that MiCA mandates for licensed platforms no longer apply. Teng acknowledged the irony directly. "Once it goes into a self-hosted wallet, the risks actually amplify," he said. "You don't have proper AML and KYC controls over those." He added a sharper question for policymakers: "Does the MiCA regime then serve its purpose to make sure that you minimize risk for the users?" Teng also warned that inconsistent MiCA implementation risks pushing "users, companies, investment, jobs, and tax revenue elsewhere."

BNB Chain, the blockchain network that originated with Binance but operates as a separate entity, moved quickly after July 1 to publish migration guides aimed at EU users, positioning itself as a destination for funds leaving the exchange.

Why This Matters Beyond Europe

The 70/30 split is not only an EU story. Regulators across Africa and South Asia are building centralized, licensed-intermediary frameworks at the same moment that MiCA's live results are showing how users actually behave when those frameworks exclude dominant platforms.

Nigeria, ranked sixth globally by crypto adoption, now classifies digital assets as securities under its Investments and Securities Act 2025 and imposes a 25% capital gains tax while requiring licensed platforms to report transactions to regulators.

Kenya passed its VASP Act in November 2025, splitting crypto oversight between the Central Bank and the Capital Markets Authority. Kenya has already begun calibrating its tax approach based on adoption behaviour: it removed a controversial 3% Digital Asset Tax on gross transaction value and replaced it with a 10% Excise Duty on fees, offering a concrete example of adaptive regulation in contrast to MiCA's more rigid implementation.

South Africa is consulting on its Draft Capital Flow Management Regulations (2026), which analysts warn could effectively eliminate self-custody for large holders.

All three countries appear to be building frameworks around the premise that users will remain inside regulated exchange environments, an assumption the EU data directly contradicts.

In South Asia, both India and Pakistan rank in the global top 10 for crypto adoption by volume. Binance holds an operational license in India and received a preliminary no-objection certificate from Pakistan's Virtual Assets Regulatory Authority (PVARA) for preparatory operations. India's Financial Intelligence Unit levied fines on Binance in 2024 before clearing it to return. Its framework requires domestic registration but does not restrict self-custody. Pakistan's PVARA is still in early design stages. The regional stakes are considerable: according to Chainalysis, aggregate on-chain transaction volumes across the Asia-Pacific region grew 69% year-over-year, from $1.4 trillion to $2.36 trillion. Both regulators have access to concrete evidence, rather than projections, to inform how aggressively they calibrate exchange licensing requirements.

Africa's aggregate on-chain transaction value reached $205 billion in the 12 months ending June 2025, a 52% year-over-year increase. The continent also accounts for 70% of the global mobile money market, a sector worth $1 trillion. Mobile-native financial habits in Nigeria, Kenya, and Ghana mean self-custody adoption could, analysts note, respond even more sharply to exchange restrictions than Europe's did.

What Comes Next for Binance

Binance intends to pursue a new MiCA application through France. An unnamed Binance head of Europe indicated the process should move faster than the Greek filing, given the regulatory groundwork already completed.

Binance's Asia-Pacific leadership has separately confirmed plans to add five additional licenses across the region in 2026, building on existing permits in Australia, India, Indonesia, Japan, New Zealand, and Thailand. Pakistan, where Binance holds a PVARA no-objection certificate for preparatory operations, represents a separate and earlier-stage milestone distinct from that confirmed permit list.

Teng framed the broader regulatory problem in a single line: "Frameworks are only as strong as their implementation." For regulators in Lagos, Nairobi, Karachi, and Mumbai now watching closely, Binance's EU service suspension has produced one of the first large-scale real-world tests of that principle, and the results suggest the gap between regulatory intent and user behavior may be wider than many framework architects anticipated.