- BaFin halted Ethena’s USDe token over MiCA violations, citing inadequate reserves and organizational flaws; ENA dropped 6.5% post-announcement.
- USDe, pegged to $1 via crypto and futures, failed compliance checks for asset safeguards under EU stablecoin rules.
Germany’s financial authority, BaFin, has ordered crypto firm Ethena to stop offering its USDe token to the public, citing failures to meet EU regulatory standards. The decision follows a review of Ethena’s application under the Markets in Crypto-Assets (MiCA) framework, which governs stablecoins.
BaFin identified gaps in Ethena’s business structure and noncompliance with MiCA rules, including requirements for asset reserves and capital safeguards. USDe, marketed as a synthetic dollar pegged to $1, is classified as an “asset-referenced token” under MiCA because its value relies on cryptocurrencies like Bitcoin and Ether, paired with derivatives contracts. The token generates yield through trading strategies tied to futures markets.
“BaFin also has reasonable grounds to suspect that Ethena GmbH is publicly offering securities in Germany in the form of ‘sUSDe’ tokens of Ethena OpCo. Ltd. without the required securities prospectus,” the regulator said.
Ethena launched USDe on June 28, 2024, two days before MiCA’s stablecoin rules took effect. While firms could continue operations during license reviews, BaFin intervened after determining Ethena’s practices posed risks. The regulator also raised concerns that Ethena’s staked token, sUSDe, may constitute unregistered securities in Germany.
In response, Ethena stated it would explore alternative regulatory pathways but did not specify adjustments to its model. The firm’s USDtb token, backed by BlackRock’s tokenized Treasury fund, remains unaffected by the order.
Ethena’s governance token, ENA, fell 6.5% within 24 hours of the announcement, reflecting market unease. The token’s decline follows broader scrutiny of protocols blending decentralized finance with complex financial instruments.
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
MiCA’s stablecoin regulations aim to standardize transparency and consumer protections across the EU. Ethena’s case highlights challenges for crypto projects navigating evolving rules, particularly those using novel mechanisms to maintain price stability. BaFin’s move signals stricter oversight of asset-backed tokens that diverge from traditional reserve models.
Ethena’s next steps will test whether alternative frameworks can satisfy both operational goals and regulatory expectations.
