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

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.