TechFlow news — On March 21, according to an official statement from Ethena, the German Federal Financial Supervisory Authority (BaFin) has notified its Frankfurt-based entity, Ethena GmbH, that its MiCAR (Markets in Crypto-Assets Regulation) compliance application will not be approved. However, Ethena emphasized that this decision will not affect the current listing status of USDe on exchanges, nor the minting and redemption services provided through its British Virgin Islands entity, Ethena (BVI) Limited.
Ethena stated that USDe remains fully asset-backed, with no assets "frozen," and all assets remain available for redemption. The company will revise relevant terms of service within the coming week to reflect these changes. This incident will not impact the normal user experience for most users.
However, according to BaFin's official announcement, the regulator has halted Ethena GmbH’s new business activities related to issuing the USDe stablecoin in Germany, citing significant organizational deficiencies and compliance violations during the MiCAR licensing process, including improper reserve asset management and failure to meet capital requirements.
BaFin has taken a series of measures, including freezing Ethena GmbH’s reserve assets, restricting management’s ability to dispose of assets, shutting down relevant functions on its website, and appointing a supervisor to oversee enforcement. Additionally, BaFin suspects that Ethena GmbH conducted an unlicensed public offering of sUSDe security tokens without providing the required prospectus. Currently, Ethena GmbH customers are temporarily unable to redeem USDe tokens, although secondary market trading remains unaffected.
