Ethena Labs, the developer behind the synthetic stablecoin USDe, has officially exited the German market following an agreement with the country’s financial regulator, BaFin. The decision comes just weeks after BaFin froze USDe operations, citing compliance shortcomings and potential securities law violations.
In an announcement on April 15, Ethena confirmed that it will shut down its German subsidiary, Ethena GmbH, and will no longer pursue MiCA (Markets in Crypto-Assets Regulation) authorization within the country. The company clarified that no minting or redemption of USDe had occurred under Ethena GmbH since BaFin's intervention on March 21.
All German-based users have since been migrated to Ethena’s BVI-based entity, severing ties with the local branch.
USDe, which currently ranks as the fourth-largest stablecoin with a $4.9 billion market cap, differs from traditional stablecoins like USDT and USDC by relying on a delta-hedging strategy involving spot assets and onchain liquidity buffers.
This development highlights growing regulatory pressure under the EU’s MiCA framework, which imposes strict requirements on stablecoin issuers around reserve backing, asset segregation, and transparency. While firms like Circle, Crypto.com, and Societe Generale have secured MiCA approval, Tether and now Ethena remain absent from the compliant list.
Ethena’s exit underscores the tightening regulatory climate for stablecoin issuers in Europe’s largest economy — and potentially signals broader scrutiny ahead.
