BaFin Prohibits Ethena from Selling USDe Stablecoin in Germany

The German Financial Supervisory Authority (BaFin) has just decided to ban the public offering of Ethena GmbH's USDe stablecoin in Germany, citing violations of the EU's MiCA regulations and unauthorized securities sales. This is a severe blow to Ethena, as USDe is currently the third-largest stablecoin in the market, only behind USDT and USDC.

According to BaFin, USDe and sUSDe - two tokens issued by Ethena - can be considered disguised securities due to the interchangeability between these two types of tokens. This brings them under the regulation of European securities law, leading to Ethena being accused of issuing unauthorized securities.

Strong Measures from BaFin

To enforce the ban, #BaFin has taken a series of strong measures against Ethena:

  • Freeze the collateral assets of USDe.

  • Close the Ethena website's information portal.

  • Stop accepting new customers.

  • Appoint a representative to oversee Ethena's operations.

However, it is noteworthy that BaFin does not prohibit users from trading USDe on the secondary market, meaning that those who already own USDe can continue to buy and sell on exchanges.

BaFin "Rejects" Ethena's Approval Application

#Ethena GmbH submitted an approval application under MiCA on July 29, 2024, hoping to be licensed to operate under the "grandfathering" mechanism (allowing operation under old regulations). However, BaFin rejected the application on March 21, 2025, citing serious deficiencies in Ethena's business structure that do not meet MiCA standards.

This means that USDe has no chance of continuing to be legally offered in Germany in the near future.

Ethena Speaks Out, ENA Drops

Immediately after the ban, Ethena Labs spoke out on platform X, asserting that the collateral assets of USDe remain safe and users can still exchange USDe through Ethena BVI Limited. However, this cannot prevent negative impacts on the market.

The price $ENA - Ethena's governance token - has dropped nearly 7% in the past 24 hours, currently trading around 0.35 USD. The decline is not only due to BaFin's ban but also influenced by the gloomy trend of the crypto market over the weekend.

Despite being embroiled in legal controversy, Ethena continues to receive large investments from financial institutions:

  • December 2024: Partnership with World Liberty Financial, a DeFi protocol founded by the family of US President Donald Trump. In which, World Liberty Financial purchased 500,000 ENA.

  • February 24, 2025: Ethena raises 100 million USD to launch iUSDe - a stablecoin version for institutional investors.

  • February 26, 2025: MEXC exchange purchases 20 million USDe to promote the use of this stablecoin.

  • March 12, 2025: MEXC Ventures continues to invest 36 million USD into Ethena and USDe.

This shows that Ethena remains a highly attractive project to investors, despite the legal risks surrounding it.

The Future of Ethena and USDe

With BaFin's strong "whistleblow", Ethena may face greater legal pressures in other countries within the EU. If other regulatory agencies follow BaFin's lead, USDe risks being banned from being offered throughout the EU territory.

However, Ethena still has options:

  • Find ways to restructure the operational model to comply with MiCA.

  • Redirect to markets outside of Europe, especially the US, Middle East, and Asia.

  • Continue to expand the ecosystem, such as the plan to integrate stablecoins into the Telegram app this year.

However, the current situation remains a tough puzzle for Ethena. Can #USDe escape the legal net and continue to develop, or will this be the beginning of a larger crisis? The answer is still ahead!