Catenaa, Wednesday, April 16, 2025-Ethena Labs, the developer behind the synthetic stablecoin USDe, said Tuesday it has shut down its German operations and withdrawn its application for regulatory approval under the European Union’s Markets in Crypto-Assets Regulation (MiCAR).
The decision follows enforcement action by Germany’s financial authority, BaFin, over noncompliance issues.
The crypto firm confirmed via social media that it had agreed with BaFin to wind down all activities of its German entity, Ethena GmbH. The company stated all German users had already transitioned to its British Virgin Islands-based affiliate, Ethena (BVI) Limited.
Ethena GmbH has not minted or redeemed USDe tokens since March 21.
The BVI entity continues operations and has issued approximately 5.4 billion USDe tokens, mostly outside Germany and prior to MiCAR enforcement.
BaFin’s March 25 rejection cited major deficiencies in Ethena’s organizational structure and flagged the firm’s yield-bearing token, sUSDe, as potentially qualifying as a security under German law.
That would require a registered prospectus for public offerings. BaFin also ordered custodians to freeze reserves and halted primary market offerings within Germany.
While secondary trading of USDe remains unaffected, the case underscores the stricter climate for stablecoin issuers in the EU under MiCAR, which fully took effect in late 2024.
MiCAR enforces full-reserve backing, capital requirements, and licensing. Major exchanges such as Binance and Kraken have responded by delisting noncompliant stablecoins.
