In the context of Europe tightening control over the crypto market through the new MiCA law, one of the prominent names in the stablecoin industry – Ethena Labs – has officially announced its withdrawal from the German market, marking a significant setback in their expansion journey within the EU.



BaFin takes strong action, USDe is 'frozen'


Ethena Labs' decision to withdraw came after the German Federal Financial Supervisory Authority (#BaFin ) issued a ban on the sale of the stablecoin USDe in the country starting in March. According to BaFin, the issuance and circulation of USDe pose serious violations related to securities laws and crypto trading regulations.


Notably, this agency has also completely suspended USDe's operations in Germany, showing the superior severity of MiCA – the new legal framework of the EU for digital assets, which officially comes into effect from December 2024.



Ethena Labs is forced to 'move house'


Under pressure from BaFin, #EthenaLabs has dissolved its Ethena GmbH branch in Germany, while transferring all customers there to its subsidiary Ethena (BVI) Limited, which operates in the British Virgin Islands – a more flexible jurisdiction.


This is seen as a strategic defensive measure to avoid prolonged legal conflicts while protecting the current users' interests.



Why is Germany being so decisive?


Not only Ethena, crypto platforms in Germany are facing an unprecedented wave of strict regulations. According to information from the German Federal Police, by the end of last year, as many as 47 crypto exchanges were closed due to suspected involvement in money laundering and illegal cash flows.


Germany – as the economic leader of the EU – wants to prove that crypto is not beyond the reach of the law, especially as more and more retail investors enter the market.



Ethena and USDe – From great expectations to difficult realities


Ethena Labs is a profit-generating protocol in the crypto field, with a TVL (total value locked) reaching $4.9 billion – an impressive figure shortly after its launch.


The stablecoin USDe, their flagship product, is referred to as a 'synthetic dollar' – not backed by cash, but by crypto assets like BTC, ETH, and other liquidity tokens. This design helps USDe provide yields for holders, but also makes it difficult to meet the stringent standards of #MiCA .


As of now, USDe is the fourth largest stablecoin globally, with a circulating value of approximately $4.9 billion. However, the token ENA of Ethena Labs has decreased by more than 6% in just the past 24 hours, currently at $0.28, which is 80% lower than its peak. This shows that market sentiment is negatively affected by the withdrawal from Germany.



MiCA – opportunity or challenge?


MiCA (Markets in Crypto-Assets) is the first comprehensive legal framework of the EU aimed at regulating the digital asset market, with a major focus on stablecoin regulations.


The main requirements of MiCA for stablecoins include:



  • Have sufficient reserve assets to guarantee value



  • Separate customer assets from reserve assets



  • Conduct transparent periodic reporting



  • Registered and licensed by the relevant authorities in each EU country




Although expected to create a safer and more stable ecosystem for consumers, MiCA is proving to be difficult to adapt to, especially for crypto projects with non-traditional business models like Ethena.



Not everyone can pass the 'MiCA barrier'


As of February 2025, there are 10 approved stablecoin issuers in Europe, including:


  • Circle (issues USDC)



  • Crypto.com



  • Societe Generale



  • Membrane Finance




However, Tether – the largest stablecoin issuer in the world (USDT) – has not appeared on this list. This indicates that even industry giants may not meet the standards set by MiCA.


Recently, Google has also updated its advertising policy for crypto services in Europe, requiring full compliance with MiCA – this further demonstrates the extensive influence of this legislation on the entire industry.



What lessons should Binance users and the crypto community learn?


Ethena Labs' withdrawal from Germany indicates that expanding into the EU market is no longer as easy as before. Users and investors on Binance – who could previously access stablecoins like USDe, USDT, or USDC – should:



  • Closely monitor legal changes in the European region, especially if intending to trade or use digital assets here.



  • Pay attention to the origin and legality of stablecoins listed on exchanges, as not all types are allowed to operate in every country.



  • Consider the risks of liquidity and legality if investing in tokens related to platforms affected by MiCA.




In the long term, MiCA could create a safer and more stable environment for users in Europe, but the transition period will be a significant challenge for both projects and investors.



Risk warning


Crypto is a relatively new field, with many fluctuations and significant legal risks. This article is for informational purposes only and should not be considered investment advice. Participating in digital asset projects, especially in complex jurisdictions like the EU, requires thorough research and careful consideration. Crypto is not suitable for everyone.