BaFin, the German monetary regulatory authority, has prohibited all public gross sales of Ethena GmbH’s USDe (USDe) — an artificial greenback — claiming the token violates the European Union’s MiCAR rules and accused the agency of promoting unregistered securities within the area.
BaFin ordered Ethena to freeze the reserve property that again the token, shut down the web site portal, and ordered the agency to cease taking new prospects, the regulator wrote in an announcement.
BaFin additionally appointed a consultant to watch the continued state of affairs with Ethena. In a translated assertion, the regulator wrote:
“The BaFin additionally has cheap grounds to suspect that Ethena GmbH in Germany sells securities within the type of sUSDe tokens from Ethena OpCo. Ltd. with out the required prospectus.”
“The USDe and sUSDe tokens are interconnected in such a means that buyers can obtain a sUSDe token in alternate for a USDe token,” the assertion reads.
Regardless of the ban on major gross sales and issuance of the token, secondary gross sales of the token won’t be prohibited or affected, the regulator stated.
In a press release on X, Ethena Labs stated the backing of USDe stays unaffected, and the token can nonetheless be redeemed by way of Ethena BVI Restricted.
Supply: Ethena Labs
Ethena GmbH information for MiCA approval
Ethena submitted a request for regulatory approval underneath MiCA on July 29, 2024, and the agency anticipated to be “grandfathered” into the prevailing regulatory framework.
Nonetheless, BaFin denied the applying on March 21, citing “critical deficiencies within the enterprise group” and a scarcity of compliance with the MiCA framework.
BaFin acknowledged that there are at the moment round 5.4 billion Ethena tokens in circulation. Nonetheless, many of those tokens had been minted exterior of the German jurisdiction and earlier than MiCA took impact.
Ethena attracts funding for its merchandise
Ethena continues to draw institutional funding for its merchandise, dangers related to artificial {dollars} however.
Ethena raised over $100 million from buyers in February 2024 to launch a brand new token known as iUSDe geared towards institutional buyers.
The agency additionally partnered with World Liberty Monetary, a decentralized finance (DeFi) protocol began by US President Donald Trump in December 2024.
As a part of the settlement, World Liberty Monetary bought 500,000 ENA tokens — the governance token of Ethena.
On Feb. 26, the MEXC crypto alternate introduced a $20 million funding in Ethena’s USDe to advertise stablecoin use.
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