Ethena Labs has reached a final agreement with Germany’s financial regulator BaFin over the fate of its euro-area stablecoin, USDe, operations.
The company announced on Wednesday that BaFin and Ethena GmbH, its German subsidiary, have agreed on a 42-day redemption plan for holders of the USDe stablecoin.
USDe Redemptions End August 6 as Ethena GmbH Exits EU Market
The redemption window, which began this week, will close on August 6. During this time, USDe holders can file redemption claims directly with Ethena GmbH. BaFin has appointed a special representative to oversee the process.
After the deadline, Ethena GmbH will be considered officially wound up in Germany, the European Union, and the European Economic Area.
From August 7, all USDe-related claims must be directed to Ethena’s offshore affiliate, Ethena (BVI) Ltd, based in the British Virgin Islands.
Ethena Labs said the redemption process will fully close out any obligations tied to USDe within Germany.
“Upon conclusion, Ethena GmbH will have no outstanding issues related to Ethena GmbH’s USDe-related operations,” the company stated.
We are pleased to share BaFin and Ethena GmbH have agreed to a redemption plan providing holders the option to redeem USDe if they so wish.
The plan was initiated via BaFin administrative order which concurrently revokes BaFin's previous March 21 2025 order.
BaFin has updated…
— Ethena Labs (@ethena_labs) June 25, 2025
Ethena did not confirm whether it intends to seek re-entry into the European market.
This resolution follows a months-long regulatory dispute. In March, BaFin ordered Ethena GmbH to halt all public offerings of its USDe stablecoin.
The regulator cited violations of the EU’s Markets in Crypto-Assets Regulation (MiCA), and accused the company of offering yield-generating sUSDe tokens that may constitute unregistered securities.
BaFin also instructed the company to freeze USDe reserve assets, block access to them by managing directors, and stop accepting new users. The firm was told to shut down its website and cease offering services within the EU.
Although primary issuance of USDe was halted, secondary market trading has not been affected.
BaFin flagged what it called “serious deficiencies” in Ethena GmbH’s compliance with MiCA rules, particularly regarding capital and reserve management.
The company had been operating under a transitional allowance while awaiting full regulatory approval.
Addressing the enforcement action, BaFin said, “Holders of USDe tokens cannot redeem them directly with Ethena GmbH.”
It also raised concerns about sUSDe, which is linked to USDe and offers additional returns, warning it could breach securities laws.
In a post on X, Ethena Labs responded by assuring users that all redemptions remain active through its BVI-based entity.
The firm said USDe is fully backed and denied reports that its assets were frozen.
“All funds remain accessible,” the company wrote, promising to update its terms soon to reflect the regulatory changes.
The dispute marks a major setback for Ethena’s expansion into regulated stablecoin markets.
The resolution, while bringing clarity to German users, leaves questions open about the firm’s future in the EU.
Ethena’s Exit from Germany Highlights MiCAR’s Tightening Grip on Stablecoins
Following the regulatory clampdown by Germany’s BaFin, Ethena Labs has officially begun winding down its operations in the country and withdrawn its application for MiCAR authorization.
@ethena_labs exits Germany, halting MiCAR application after BaFin crackdown, and shifts USDe stablecoin operations to the British Virgin Islands.#CryptoRegulation #Stablecoins https://t.co/2Ntt5WKJxV
— Cryptonews.com (@cryptonews) April 15, 2025
On April 15, Ethena Labs confirmed it would shut down Ethena GmbH, its German subsidiary, and withdraw from pursuing MiCAR authorization.
BaFin had previously ordered the company to halt public sales of USDe, citing concerns over its compliance status and the potential classification of sUSDe as a security under German law, due to its yield-bearing structure.
While MiCAR’s transitional period gave firms like Ethena some breathing room after applying for licenses, Ethena applied in July 2024, BaFin’s concerns went deeper.
It flagged sUSDe, the yield-bearing version of USDe, as possibly a security under German law, raising red flags over investor protection and the need for full disclosure.
With the regulatory pressure mounting, Ethena agreed to a 42-day wind-down period, transferring all whitelisted German users to its British Virgin Islands-based entity, Ethena (BVI) Limited.
The firm noted that most of the 5.4 billion USDe in circulation had been issued either outside Germany or before MiCAR took effect.
BaFin’s move also reflects a wider trend. Since MiCAR fully kicked in by late 2024, exchanges like Kraken, Crypto.com, and Binance have delisted stablecoins like USDT, DAI, and PAXG across Europe.
MiCA compliance required: Crypto-asset service providers must delist non-compliant stablecoins.#MiCA #ESMA $USDT #Stablecoinhttps://t.co/LNE1u6WlSq
— Cryptonews.com (@cryptonews) January 20, 2025
At the same time, licensed platforms are turning to MiCAR’s passporting system to keep operating legally across the 30 EEA countries.
The post Ethena Lab’s USDe Saga Ends: BaFin Forces 42-Day Redemption Plan After Regulatory Standoff appeared first on Cryptonews.
