German Authorities Halt Sale of USDe Stablecoin

The German financial regulator BaFin has halted the sale of the USDe stablecoin issued by Ethena Labs, citing “serious deficiencies” and non-compliance with MiCA requirements.

“BaFin has prohibited Ethena GmbH from further public offering of the USDe token and instructed the company to freeze the corresponding reserve assets with custodians,” the press release states.

According to the regulator, the company took advantage of the transitional provisions for implementing MiCA.

Under European cryptocurrency legislation, issuers of stablecoins pegged to other coins, who opened sales or applied for registration before June 30, 2024, are allowed to operate until a direct ban or the receipt of the appropriate license.

Ethena’s application was submitted on July 29. The company offered USDe on the German market from June 28, although a “significant portion” of the tokens was issued outside Germany before that.

The agency added that there are grounds to suspect Ethena of publicly offering securities in the form of the sUSDe token without proper registration.

The regulator ordered the freezing of the project’s reserves, restricted the powers of managers over stored assets, blocked access to the website, and appointed a special representative to oversee the implementation of the prescribed measures.

BaFin’s restrictions will not affect secondary market trading.

Ethena Labs expressed disappointment with the regulator’s decision and noted that they will continue to “evaluate alternative frameworks.”

Since its inception, Ethena has been exploring various options and jurisdictions when it comes to regulatory frameworks globally that would be conducive to our business, and as a result we have multiple entities within our structure facilitating minting and redemption. A MiCAR…

— Ethena Labs (@ethena_labs) March 21, 2025

“This decision in no way disrupts current USDe listings or minting and redemption through Ethena (BVI) Limited. USDe remains fully backed. Contrary to reports, no assets have been ‘frozen,’ and all remain available for redemption. Next week, we will review our Terms accordingly,” the developers commented.

In March, Ethena Labs and Securitize introduced the new EVM blockchain Converge.