Ethena Labs has shut down its German subsidiary, Ethena GmbH, following regulatory issues with BaFin. The German regulator had ordered the company to stop public sales of USDe due to MiCAR noncompliance.

Minting and redemption of USDe are now handled through Ethena Limited in the British Virgin Islands.

BaFin flagged flaws in Ethena GmbH's approval process and raised concerns over unregistered sUSDe token sales. The regulator froze reserves, shut down the website, and banned new sign-ups. Secondary market listings of USDe remain unaffected.

Ethena expressed disappointment over the MiCAR denial but stated it is exploring alternative regulatory options.

The company's exit from the German market underscores the increasing regulatory pressure on crypto issuers in Europe, especially in the lead-up to MiCAR's full implementation.

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