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German Regulators Block Ethena’s USDe Over Compliance Issues
In a surprising move, the German financial regulator BaFin has blocked the sale of Ethena Labs’ USDe stablecoin due to compliance issues and concerns over unregistered securities. This development highlights the growing regulatory scrutiny in the cryptocurrency space.
According to reports, Ethena GmbH, the German subsidiary of Ethena Labs, had entered the local market by taking advantage of a transitional arrangement under the EU’s Markets in Crypto Assets (MiCA) regulations. However, it seems that the company failed to meet the necessary compliance standards regarding capital reserves.
It is alleged that Ethena GmbH had issued tokens since June 2024 and currently has approximately 5.4 billion tokens in circulation. This move by BaFin sends a strong signal about the importance of regulatory compliance in the crypto industry.
Ethena Labs expressed disappointment over the decision but assured users that USDe remains fully backed and operational outside Germany. The company is actively exploring MiCA certification and considering alternative jurisdictions to continue its operations.
While this development may have significant implications for Ethena Labs, it will not disrupt any current listings of USDe on secondary markets or minting and redemption via Ethena BVI Limited.
This decision by BaFin highlights the increasing regulatory scrutiny in the cryptocurrency space. Despite the setback, Ethena Labs remains a key player in the industry, having raised over $100 million in funding from investors to launch its new token called iUSDe.
The company has also secured investments from notable firms such as MEXC and World Liberty Financial.
Source: https://cryptotale.org/german-regulators-block-ethenas-usde-over-compliance-issues/
