BaFin Freezes Ethena GmbH's Asset Reserves over USDe Token Deficiencies Under MiCA

Germany’s financial regulator, BaFin, has identified
significant deficiencies in Ethena GmbH’s approval process for its USDe token.
As a result, BaFin has implemented immediate supervisory measures, including a
ban on publicly offering the token and an order to freeze the company’s asset
reserves held by depositary agencies.

BaFin suspects that Ethena GmbH has been offering securities
in Germany without an approved prospectus. Additional regulatory actions,
including a potential ban on these offerings, are being considered.

5.4 Billion USDe Tokens Circulate Globally

Ethena GmbH, based in Frankfurt am Main, issues the USDe
token, classified as an asset-referenced token under the Markets in
Crypto-Assets Regulation (MiCA). The company uses various crypto assets and an
algorithmic hedging strategy to maintain parity with the US dollar.

Under MiCA’s transitional rules, issuers of asset-referenced
tokens can operate while awaiting regulatory approval. Ethena GmbH had applied
for approval but began issuing USDe in Germany before receiving it.

BREAKING: The German Federal Financial Supervisory Authority (BaFin) has found serious flaws in Ethena GmbH’s approval process for USDe tokens. As a result, BaFin has ordered immediate enforcement measures to halt USDe token offerings and freeze asset reserves. pic.twitter.com/eNxjfc4nlx

— CryptoPotato Official (@Crypto_Potato) March 21, 2025

Currently, around 5.4 billion USDe tokens are in
circulation, with a significant portion issued outside Germany before MiCA’s
implementation. Furthermore, Ethena BVI Limited, based in the British Virgin
Islands, has been issuing the token since the beginning of 2025.

BaFin’s review found shortcomings in Ethena GmbH’s business
organization, including non-compliance with MiCA’s asset reserves and capital
requirements. The regulator will provide further updates once the approval
process concludes.

Meanwhile, the USDEUSD daily chart shows a bearish move starting from
yesterday. As of now, it looks like the price may continue with another bearish
day.

Investigation for Unapproved Token Offerings

BaFin has imposed several measures, including freezing the
company’s asset reserves, restricting access by executives, and blocking new
business activities, including its website. While these actions are not yet
final, token holders cannot redeem USDe through Ethena GmbH, though secondary
market trading remains unaffected.

Additionally, BaFin suspects that Ethena GmbH is offering
“sUSDe” tokens, issued by Ethena OpCo. Ltd, without the necessary
prospectus. These sUSDe tokens, exchanged for USDe tokens, provide returns to
holders.

This article was written by Tareq Sikder at www.financemagnates.com.



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