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- BaFin banned Ethena GmbH from offering USDe due to major approval procedure shortcomings.
- Ethena Labs assures USDe remains redeemable globally through its BVI-based entity.
The decisive move comes from the German financial regulator, BaFin, which has just imposed a ban on Ethena GmbH, a subsidiary of Germany-based Ethena Labs. The main reason? “Serious deficiencies in the approval procedures.” This action means that Ethena GmbH is no longer allowed to offer the USDe stablecoin publicly in the country.
Ethena Labs quickly responded by stating that the ban does not affect the USDe minting or redemption process globally. Minting and redemption activities can still run normally through their British Virgin Islands-based entity, Ethena (BVI) Limited.
Since its inception, Ethena has been exploring various options and jurisdictions when it comes to regulatory frameworks globally that would be conducive to our business, and as a result we have multiple entities within our structure facilitating minting and redemption. A MiCAR…
— Ethena Labs (@ethena_labs) March 21, 2025
So, for users who are used to minting USDe through the platform, there are no drastic changes. Assets are also safe—nothing is frozen, and everything is still available for redemption.
Meanwhile, following this news, ENA is trading at about $0.3587, corrected 1.61% over the last 24 hours and down 3.08% over the last 7 days.
Despite Record Withdrawals, USDe Keeps Its Balance
On the other hand, this drama comes just a few weeks after USDe set a redemption record. According to a CNF report, in early March, the stablecoin experienced a withdrawal of $268 million in just one day. This figure reduced the circulating supply by 4.7%.
Interestingly, despite the large amount of redemption, the price of USDe remained stable. There were no sharp spikes or drops that usually make your heart beat faster, like riding a roller coaster without a seat belt.
New Project: Ethena Unveils Converge with Securitize
If you think Ethena Labs is just busy “putting out fires” of regulation, it turns out not. On March 17, 2025, they partnered with Securitize to launch a new blockchain project called Converge. This platform is compatible with the Ethereum Virtual Machine (EVM) and is specifically designed to bridge the world of traditional finance and DeFi.
Converge will later become a place for institutional investors to access DeFi products in a safer and more scalable way. Some of the early partners who are ready to enter this ecosystem include well-known names such as Pendle, Avara, Ethereal, Morpho, and Maple Finance. This project can be said to be Ethena’s way of staying relevant amid the regulatory storm.
A German Ban Doesn’t Spell the End for USDe
Banning an offering in one region is no small matter, especially in a country as strict as Germany. But in the crypto era, a local ban does not automatically kill the entire ecosystem. Imagine if you were banned from selling coffee in one shop but still had dozens of other shops in the next town. That’s what happened to Ethena.
BaFin banned USDe, although their worldwide activity continues to be alive. For most of its minting users, entities in the BVI indeed are the “main route.” This means that even though Ethena GmbH was hit by the hammer, USDe as a whole has not entered the red zone.
Of course, the question now is: will other authorities follow in BaFin’s footsteps? Or just wait and see if Ethena can improve and fix the loopholes that were deemed “serious” by the German regulator? For now, Ethena Labs is choosing a quiet path. They stated that they will review their terms and conditions in the near future. Yes, maybe like changing the rules of the game in the middle of a match.
