Rules designed to bring order can end up driving people away - and this figure delivers a sharp blow to that intention. Binance CEO Richard Teng revealed that 70% of fund withdrawals by European users flow to self-hosted wallets, rather than platforms regulated under the MiCA framework.
The claim quickly went viral on social media, sparking debate over whether strict regulation genuinely protects investors - or simply pushes them out of the observable system.
The Boomerang Effect of Regulation
MiCA (Markets in Crypto-Assets) was designed to be Europe’s most comprehensive crypto regulatory umbrella, aiming to steer activity toward licensed, monitored exchanges and service providers. But if Teng’s data is accurate, the vast majority of users are choosing to hold their own private keys instead - storing assets in personal wallets beyond the reach of any intermediary.
For many crypto holders, this move makes total sense. Self-hosted wallets offer complete control over assets without intermediaries, no platform reporting obligations, and zero risk of third-party fund freezes. The crypto community’s long-standing maxim resonates once more: “not your keys, not your coins”.
An Unresolved Dilemma
Ironically, this migration to self-custody creates a new puzzle for regulators. While assets moved to private wallets still exist, they become far more difficult to track for taxation and anti-money laundering purposes - precisely the opposite of what MiCA intended to achieve.
To be sure, this statement comes from an exchange chief with an interest in highlighting the burdens of regulation. Yet if the trend is real, Europe faces an uncomfortable question: when rules become too restrictive, do they truly protect - or do they drive people into darker, unmonitored spaces? The answer will heavily shape the continent’s crypto policy direction.
Reported from @WatcherGuru on X.
Disclaimer: This article is for informational and educational purposes only, not financial advice. Cryptocurrency assets are highly volatile and carry significant risk. Always do your own research (DYOR) and never invest more than you can afford to lose.
