BaFin Halts Ethena's USDe Sales Over MiCAR Violations

The German Federal Financial Supervisory Authority, BaFin, has issued an order to Ethena GmbH, mandating the cessation of all public sales of its stablecoin, USDe. This directive follows the discovery of significant flaws in the approval process for USDe by the German financial markets regulator.

According to the BaFin announcement on March 21, 2025, the public sales of Ethena (ENA)’s synthetic dollar, USDe, were found to be in violation of the European Union’s Markets in Crypto Asset Registration (MiCAR) rules. The lack of compliance with MiCAR has become a critical hurdle for stablecoin issuers, as stablecoin regulation is a major enforcement priority for the EU.

BaFin stated that there are reasonable grounds to suspect that Ethena GmbH in Germany is selling securities in the form of sUSDe tokens from Ethena OpCo. Ltd. without the necessary prospectus. Consequently, BaFin has ordered Ethena to immediately halt any sales to the public.

The enforcement measures imposed by BaFin include a freeze on USDe reserves held by Ethena’s custodian. Additionally, Ethena GmbH is required to shut down its website portal and cease registering new customers. While Ethena GmbH has been prohibited from selling USDe, the order only applies to primary sales, leaving secondary sales unaffected.

In response to the news, Ethena Labs issued a statement expressing disappointment over the decision but affirmed their commitment to evaluating alternative regulatory frameworks. The company clarified that BaFin’s order does not impact the stablecoin’s listing or the minting and redemption processes handled by Ethena Limited, their entity registered in the British Virgin Islands. Ethena also emphasized that USDe remains fully backed and that no assets have been frozen.

This regulatory action by BaFin underscores the increasing scrutiny that stablecoins and other digital assets are facing in Europe. The decision sends a clear message to other stablecoin issuers and digital asset providers about the importance of complying with regulatory requirements. It is expected to prompt other issuers to review their compliance practices and ensure that their products meet the necessary regulatory standards.

The prohibition of Ethena GmbH's USDe highlights the need for greater transparency and accountability in the digital asset industry. Regulators are focusing on ensuring that digital assets are subject to the same level of scrutiny as traditional financial instruments. This includes requiring issuers to provide clear and accurate information about their products and to comply with anti-money laundering and know-your-customer regulations.

This move by BaFin is a significant step in the ongoing effort to regulate the digital asset industry. It underscores the importance of regulatory oversight in maintaining the stability and integrity of the financial market. As the digital asset industry continues to evolve, it is likely that regulators will take further steps to ensure that these financial instruments are subject to the same level of scrutiny as traditional financial instruments. This move is expected to have a positive impact on the industry by promoting greater transparency, accountability, and investor protection.