Germany's BaFin Bans USDe Token Offerings from Ethena GmbH, Freezes Asset Reserves

Germany's financial regulator, BaFin, has identified significant deficiencies in Ethena GmbH's approval process for its USDe token.

Germany's financial regulator, BaFin, has identified significant deficiencies in Ethena GmbH’s approval process for its USDe tokens, leading to immediate supervisory measures.

As a result, BaFin has banned the public offering of the USDe tokens and ordered the freezing of the company’s asset reserves held by depositary agencies. This action follows an application by Ethena GmbH for approval under the Markets in Crypto-Assets Regulation (MiCA).

Moreover, BaFin suspects that Ethena GmbH has been offering securities in Germany without an approved prospectus. Further regulatory steps, which may include a ban on these offerings, are being contemplated.

5.4 Billion USDe Tokens Circulate Globally

Based in Frankfurt am Main, Ethena GmbH is the issuer of the USDe token, recognized as an asset-referenced token under MiCA. The company utilizes various crypto assets and an algorithmic hedging strategy to maintain parity with the US dollar.

Issuers of asset-referenced tokens can operate transitional periods as stipulated by MiCA. Ethena GmbH had applied for approval but began issuing USDe in Germany before it was granted.

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

During its review, BaFin identified shortcomings in Ethena GmbH’s business organization and non-compliance with MiCA’s provisions on asset reserves and capital.

The regulator will provide further updates once the approval process concludes.