• BaFin shuts down Ethena GmbH after MiCA license withdrawal.
• Firm failed MiCA standards on capital, segregation, and transparency.
• USDe operations move to Ethena (BVI) Limited outside Germany.

The German financial regulator BaFin has ordered Ethena GmbH to shut down its USDe stablecoin business. The directive was announced on April 15 as the first enforcement action under the European Union(EU) Markets in Crypto-assets Regulation (MiCAR).

Ethena GmbH previously operated under the MiCA transitional provisions provided by the law, where pre-existing issuers could operate during the assessment. However, the firm withdrew its license application on April 3, 2025, and therefore ceased its legal operation under MiCA within the European Union.

Deficiencies Cited in Regulatory Compliance and Business Structure

BaFin pointed out certain matters that it claimed were serious issues related to Ethena’s internal organization and compliance with MiCAR requirements. The issues in this area were failures to meet capital adequacy standards, asset segregation and transparency obligations. In March, the regulator imposed supervisory sanctions and restricted the firm’s right to issue or redeem tokens.

In addition, BaFin has ordered Ethena GmbH to shut down its operations and execute a structured plan to redeem all the USDe tokens. This will be done under the supervision of the German financial regulator BaFin. The regulator also ordered Ethena to pay a €600,000 coercive penalty and to disable fund transfers to make creditor payments.

Transitional Period Ends Without Authorization

To facilitate its entry into the German market, Ethena utilized a MiCAR transitional permit under which issuers carrying out specific activities could continue functioning if they had applied for authorization by 30 June 2024. However, the firm’s decision to withdraw its application eliminated this temporary status.

BaFin noted that Ethena GmbH had not conducted minting or redemption business since March 21. Ethena Labs added that Ethena GmbH’s customers have been transferred to Ethena (BVI) Limited, an organization that is located in the British Virgin Islands. The company clarified that there is no business connection and ongoing interaction between the German entity and its clients.

MiCA Tightens Oversight on Stablecoin Issuers Across the EU

The MiCA framework outlines detailed regulatory requirements that will apply to cryptocurrency firms operating in the European Union. It also mandates that stablecoin issuers hold sufficient and segregated reserves, manage risks effectively, and submit reports to regulators.

Thus, BaFin states that Ethena GmbH failed to meet several of these requirements regarding the quality of reserves and the organizational structure. The regulator also noted that the firm’s yield-bearing token variant, sUSDe, could fall under security in accordance with German law, which would require more licenses.

Stablecoin Operations Shift Outside Germany

Ethena Labs also revealed that it would not seek MiCA authorization within Germany’s jurisdiction in the future. Specifically, it noted that most of the USDe stablecoin issuance happened outside the United States before the implementation of MiCA. Ethena (BVI) Limited will thus become the primary issuer of USDe, one of the largest stablecoins by market capitalization.

The company registered 5.4 billion USDT tokens as being supplied, and most of the issuances were made outside the scope of German law. Although additional purchases of USDe are still limited to those with a redemption right through Ethena GmbH, the secondary market trading of USDe proceeds uninterrupted.