Ethena Labs exits Germany, abandons MiCA license effort

Ethena Labs, the team behind the synthetic stablecoin USDe, announced it has shut down its German subsidiary, Ethena GmbH.

Ethena Labs will also no longer pursue regulatory approval under the EU’s Markets in Crypto-Assets Regulation. The decision follows a March enforcement action by Germany’s financial regulator, BaFin, which ordered the company to halt all public sales of USDe (USDe) due to MiCAR noncompliance.

In a statement posted to X, Ethena Labs confirmed it had reached an agreement with BaFin to wind down all activities of its German entity. The company emphasized that since March 21, all minting and redemption of USDe have been conducted through Ethena Limited, its entity in the British Virgin Islands.

Users previously onboarded through Ethena GmbH have transitioned to the BVI platform, and the German entity no longer has any customers or active operations.

Ethena’s ‘serious flaws’

BaFin’s March order cited “serious flaws” in Ethena GmbH’s approval process and raised concerns that the firm may have been selling unregistered securities in the form of sUSDe tokens. The regulator also froze USDe reserves held by Ethena’s custodian, forced the closure of the company’s local website, and prohibited further customer onboarding.

Although the regulatory crackdown impacts only primary sales, Ethena stated the listing of USDe on secondary markets remains unaffected. The company said it was disappointed by the MiCAR denial but is continuing to assess alternative regulatory paths.

Stablecoin compliance has become a key focus of EU regulators ahead of MiCAR’s full implementation. Ethena’s exit from the German market underscores the increasing pressure on crypto issuers to navigate a fragmented but tightening European regulatory landscape.