Binance’s regulatory issues have clearly disrupted services to its European users. The exchange missed the deadline to obtain a MiCA license in Europe; As a result, Binance has halted all transactions in France and other EU markets since July 1.
For this reason, many Binance users are currently only able to withdraw their assets. This is important because Binance was serving nearly two million customers in France before the trading suspension.
Therefore, Binance’s regulatory delay directly cut off the user’s access to the service, making the issue more than just compliance. Many of these users transfer their assets to both MiCA licensed exchanges or into their own escrow wallet.
On the other hand, according to Binance net withdrawals of approximately $1.6 billion per month. Despite this, there are still approximately $114 billion worth of crypto assets on the platform. Future license approvals will determine whether activity will improve or competitors will strengthen their regional positions.
Licensed exchanges absorb displaced liquidity
As Binance’s regulatory restrictions reshape Europe’s crypto market, MiCA-licensed Virtual Asset Service Providers (VASPs) are beginning to absorb displaced trading activity. The increased trading volume for these VASPs is due to increased liquidity on highly regulated exchanges.
According to DeFiLlama, Kraken provides approximately $431 million in spot liquidity across 1,703 markets. Coinbase follows with a share of approximately $347 million spread across 1,073 markets. Meanwhile, Crypto.com is offering around $131 million, highlighting that compatible platforms still provide deep liquidity. This trend highlights users’ preference for both uninterrupted access and strong liquidity.
While this trend marks a short-term shift towards exchange platform with higher liquidity offerings, it represents a structural change in how exchanges will compete going forward. Unless Binance brings back full MiCA services, licensed VASPs may continue to attract both liquidity and long-term user activity across Europe.
Final Summary
- Binance has faced a growing antitrust problem as MiCA-compliant exchanges attract trading activity from Europe.
- The Binance licensing process will determine whether European liquidity returns or continues to shift towards regulated VASPs.
