Breaking News: Ethena Labs Pulls the Plug on German Operations Amid Regulatory Firestorm

Ethena Labs, the masterminds behind the sizzling synthetic stablecoin USDe, just dropped a bombshell—they've shut down their German subsidiary, Ethena GmbH, faster than you can say "crypto crash."

But wait, there's more! Ethena Labs is also waving goodbye to any hopes of getting regulatory approval under the EU's Markets in Crypto-Assets Regulation. This dramatic move comes hot on the heels of a March crackdown by Germany's financial watchdog, BaFin, which threw down the gauntlet and ordered Ethena to stop all public sales of USDe due to some serious MiCAR noncompliance issues.

In a no-holds-barred statement blasted out on X, Ethena Labs revealed they've struck a deal with BaFin to wind down all activities of their German entity. They're not messing around—since March 21, all minting and redemption of USDe has been shifted to Ethena Limited, their slick operation in the British Virgin Islands.

"We have agreed with BaFin to wind down all activities of Ethena GmbH and will no longer be pursuing the MiCAR authorization in Germany. As communicated previously, Ethena GmbH has not conducted any mint or redeem activity since March 21, 2025, and all activity has been carried..."

And what about the users who were once part of the German dream? They've been smoothly transitioned to the BVI platform, leaving the German entity with zero customers and zilch active operations.

Ethena’s ‘serious flaws’

BaFin's March order didn't pull any punches, citing "serious flaws" in Ethena GmbH’s approval process and raising red flags that the firm might have been peddling unregistered securities in the form of sUSDe tokens. The regulator didn't stop there—they froze USDe reserves held by Ethena’s custodian, shut down the company's local website, and slammed the door on any new customer onboarding.

Despite this regulatory whirlwind hitting only primary sales, Ethena is standing firm, stating that the listing of USDe on secondary markets remains untouched. They're disappointed by the MiCAR rejection but are keeping their eyes peeled for alternative regulatory paths.

Stablecoin compliance is now the hot topic for EU regulators as they gear up for MiCAR's full rollout. Ethena's dramatic exit from the German market is a stark reminder of the intense pressure on crypto issuers to navigate the increasingly complex and tightening European regulatory landscape.