The Federal Financial Supervisory Authority of Germany, commonly known as BaFin, has directed Ethena GmbH to halt all public offerings of its stablecoin, USDe.
This directive follows BaFin’s identification of significant deficiencies in the approval process for Ethena GmbH’s USDe.
According to BaFin’s announcement on March 21, 2025, Ethena’s synthetic dollar, USDe, breaches the European Union’s Markets in Crypto Asset Registration regulations.
Stablecoin regulation has emerged as a top enforcement priority within the EU, highlighting that non-compliance with MiCAR presents a critical challenge for issuers of stablecoins.
“BaFin has reasonable grounds to believe that Ethena GmbH is offering securities in the form of sUSDe tokens from Ethena OpCo. Ltd. without the necessary prospectus,” stated the regulator.
As a result, BaFin has mandated Ethena to immediately stop any public sales.
Enforcement Actions
The enforcement actions include a freeze on the USDe reserves managed by Ethena’s custodian. Moreover, Ethena GmbH is required to shut down its website portal and suspend the registration of new clients.
While Ethena GmbH is barred from conducting sales of USDe, this prohibition only pertains to primary sales; secondary sales are unaffected by BaFin’s order. Following the announcement, Ethena Labs issued a statement on X.
“We have been informed today that our application under the MiCAR regulatory framework has not been approved. Although we are disappointed by this outcome, we will explore alternative frameworks moving forward.”
Ethena Labs claims that BaFin’s order does not impact the stablecoin’s listing.
The decision will also not interfere with the minting and redemption processes via Ethena Limited, the entity registered in the British Virgin Islands that oversees the majority of USDe minting.
“USDe remains fully backed, and no assets have been ‘frozen’,” Ethena remarked.