Ethena Labs shuts down German subsidiary and withdraws from MiCAR approval after BaFin enforcement on USDe - IcoHolder.

Ethena Labs, the company behind the synthetic stablecoin USDe, has shut down its German subsidiary, Ethena GmbH, and withdrawn its application for regulatory approval under the European Union’s Markets in Crypto-Assets Regulation (MiCAR). The move comes in response to enforcement action by Germany’s financial regulator BaFin in March, which ordered the company to halt public sales of USDe due to noncompliance with MiCAR.

In a statement posted on X, Ethena Labs confirmed it had reached an agreement with BaFin to cease all operations of Ethena GmbH. Since March 21, all minting and redemption of USDe have been handled through Ethena Limited, the company’s entity based in the British Virgin Islands. Customers who had been onboarded through the German arm have since been transitioned to the BVI platform, and the German entity no longer has active operations or users.

BaFin’s action cited “serious flaws” in Ethena GmbH’s approval process, including concerns that the firm may have been selling unregistered securities through its sUSDe token. The regulator also froze USDe reserves held by Ethena’s custodian, shut down the company’s German website, and barred it from onboarding new customers.

Although primary sales have been affected, Ethena emphasized that USDe’s availability on secondary markets remains intact. The company expressed disappointment over the regulatory setback but stated it continues to explore alternative compliance routes.

As the EU prepares for the full implementation of MiCAR, Ethena’s departure from the German market highlights the increasing scrutiny and regulatory complexity faced by stablecoin issuers across Europe.