Catenaa, Tuesday, March 25, 2025-Germany’s financial watchdog, BaFin, has banned the sale of Ethena GmbH’s USDe token in the country, citing approval process flaws and violations of the European Union’s Markets in Crypto-Assets Regulation (MiCAR).
BaFin ordered immediate enforcement actions, including freezing the token’s reserve assets and halting new customer registrations. The regulator further instructed Ethena to shut down its website and appointed a special representative to ensure compliance.
BaFin’s decision follows concerns about Ethena’s failure to comply with MiCAR’s requirements, including capital and reserve obligations for synthetic assets. The USDe token, which had been circulating since June 2024, is interconnected with the sUSDe token, allowing exchanges between the two. However, the ban does not affect secondary market trading.
Ethena, which had been operating under transitional provisions while awaiting MiCAR approval, has since stated that its assets remain fully backed. The company’s British Virgin Islands-based subsidiary will continue handling token redemptions. Ethena also reaffirmed its commitment to exploring alternative regulatory frameworks.
BaFin’s actions signal tightening oversight on synthetic and stablecoin assets, with growing scrutiny on compliance as MiCAR regulations are enforced across Europe. The regulator’s stance may set a precedent for future enforcement in the EU, with other synthetic asset issuers facing similar scrutiny.
