BaFin Bans Public Offering of Ethena’s USDe in Germany
Germany’s Federal Financial Supervisory Authority, BaFin, has issued an order prohibiting Ethena GmbH from offering its synthetic stablecoin USDe to the public. The action, which was made on March 21, 2025, follows concerns that Ethena’s operations fail to comply with the EU’s Markets in Crypto-Assets Regulation (MiCAR).
According to BaFin, Ethena’s issuance of USDe lacks the necessary authorisation under MiCAR, a rule that regulates crypto-related activities in the European Union. BaFin is of the opinion that the company may also be selling securities illegally in the form of sUSDe tokens by Ethena OpCo. Ltd. without an approved prospectus.
Enforcement Measures and Immediate Restrictions
In its action to enforce compliance, BaFin has directed all primary sales of USDe to be stopped within Germany. An order to freeze USDe reserves at the custodian of Ethena has also been directed by the regulator. Additionally, Ethena GmbH must take down its site and halt onboardings of new users in the country.
Despite the restrictive measures, BaFin clarified that the order applies only to primary market activities. Secondary trading of USDe is not affected by the ban, and existing holders may continue to sell the stablecoin on other platforms.
Ethena’s Reaction and Continued Activities Abroad
Ethena Labs, the umbrella organization behind the USDe ecosystem, responded to the ruling via an X post. The company was dismayed at the rejection of its MiCAR application and welcomed the closure, stating it will pursue alternative avenues of regulation.
Most importantly, the prohibition does not extend to Ethena’s activities outside of Germany. Issuance and redemption of USDe will be maintained through Ethena Limited, a registered entity in the British Virgin Islands, which carries out most issuance activity.
Ethena reaffirmed that USDe is fully funded and that customer assets were not frozen. While the ruling was a regulatory setback, the company was eager to reaffirm that it was committed to complying with applicable laws and maintaining user confidence globally.
