Woofun AI reports that Binance CEO Richard Teng criticized the EU’s MiCA regulation at the Reuters Next Asia Summit in Singapore, arguing it pushes users toward self-custody wallets.

The deeper driver is a regulatory paradox where the majority of departing users leave platforms holding MiCA licenses for unregulated spaces. Teng highlighted that compliant exchanges enforce anti-money laundering (AML) and know-your-customer (KYC) protocols, whereas self-custody lacks such oversight. Teng urged regulators to focus on licensing compliant companies rather than creating conditions that drive users into unregulated spaces.

Woofun AI data shows, Structurally, Binance has recalibrated its EU strategy by withdrawing its MiCA license application in Greece. As of July 1, the exchange suspended services for new EU customers, navigating a complex patchwork of national and EU-wide regulations.

A more critical variable is the impact on transparency; while MiCA’s unified regulatory framework mandates strict licensing, disclosure, and consumer protection requirements for exchanges and custodians, the shift away from licensed exchanges diminishes these gains. The regulation, fully effective earlier this year, aims to protect consumers, yet Teng argues it inadvertently incentivizes bypassing safeguards.

Industry analysts note that self-custody wallets offer full control over assets but heighten risks of loss, theft, and lack of recourse in disputes. This tension between regulatory oversight and user autonomy remains a central challenge for policymakers worldwide.

Richard Teng’s critique adds a high-profile voice to the debate on regulating digital assets. Whether EU regulators adjust the framework or double down on enforcement, the trend underscores a fundamental friction: rules designed to protect may push users toward greater risk.