Key highlights:

  • Binance has halted crypto trading services in France
  • French users can still withdraw assets but can no longer access spot or margin trading
  • Rival exchanges are now targeting the affected users

Crypto traders in France are moving their crypto capital from Binance after the exchange stopped providing trading services in the country. This comes after it failed to secure the approval needed under the European Union’s new Markets in Crypto-Assets (MiCA) rules.

This change took effect on July 1. This was the designated end date of the EU’s transition period for crypto companies. Exchanges were expected to obtain authorization from at least one EU member state to offer services across the bloc, which Binance failed to secure.

The exchange informed customers that their funds are safe. Users can still withdraw their assets but can no longer access trading services.

Binance trading services suspended in France

According to BFM Business, several users are now transferring their funds out of the exchange. The trading halt affects one of the largest crypto user bases in Europe.  Binance used to serve around 2 million users in France, offering spot trading, margin trading, among others.

The exchange had been working with French regulators to secure its MiCA license. Company executives previously had stated that they were committed to continuing to operate in accordance with Europe's new regulatory framework.

However, the process hit several obstacles. After this, the company withdrew its MiCA application in Greece, which reduced its chances of securing approval before the deadline.

Binance’s restrictions are not limited to France. This pause has also affected users in other European countries, like Poland, Italy, and Spain.

Users move funds as withdrawals rise

The shutdown has triggered large withdrawals from customers who would rather not wait for regulatory clarity. Some users had already moved their assets before the July 1 deadline, while some started transferring funds after trading was suspended.

One French customer told local media that they had moved their crypto holdings before the deadline rather than risk losing access to trading tools. 

"I could have left my funds on Binance while waiting for them to get approval, but the problem is that from now on you can't really touch them anymore,” she said. “But I want to be able to keep control of my cryptos and exchange them quickly if needed.”

Data shows almost $1.6 billion in net outflows from Binance over the past month. In a week in June, withdrawals reportedly hit $1.23 billion. Bitcoin deposited to other exchanges was recorded to be at least 50,000 BTC.

According to CryptoQuant, Ethereum withdrawals surged, with transactions hitting a three-year high of 166,000.

Binance ETH withdrawals

Source: CryptoQuant

Rivals look to attract former Binance users

Licensed exchanges such as Coinbase and OKX are actively poaching European users looking for platforms that already meet MiCA’s rules.

Data already shows that OKX saw millions in inflows over the past couple of days, following an aggressive campaign aimed at bringing in customers affected by the trading suspension.

The latest developments show how the European crypto market has changed under MiCA. The rules were designed to create a unified regulatory system in the EU. Apart from Binance, Bitget and MEXC also were not able to secure their license before the deadline.