German Regulator Identifies 'Deficiencies' in Ethena's USDe Stablecoin

Ethena's ENA token is down by 6.5% in the past 24 hours.

Mar 21, 2025, 3:52 p.m. UTC

The German financial supervisory authority BaFin said it identified "serious deficiencies" in Ethena's synthetic USDe stablecoin.

Ethena is the yield-generating protocol. The stablecoin has a market cap of $5.4 billion.

Ethena said on X that it will "continue to evaluate alternative frameworks," after being notified that the "application under the MiCAR regulatory framework will not be approved."

In a statement, BaFin said that the deficiencies are related to the "bank's business organization and violations of MiCAR requirements, such as those regarding asset reserves and compliance with capital requirements."

"BaFin also has reasonable grounds to suspect that Ethena GmbH

is publicly offering securities in Germany in the form of 'sUSDe' tokens of Ethena OpCo. Ltd. without the required securities prospectus," the regulator said.

Ethena's ENA tokenhad dropped 6.5% in the past 24 hours, extending losses following the announcement, according to CoinMarketCap data.

Oliver Knight

Oliver Knight is the co-leader of CoinDesk data tokens and data team. Before joining CoinDesk in 2022 Oliver spent three years as the chief reporter at Coin Rivet. He first started investing in bitcoin in 2013 and spent a period of his career working at a market making firm in the UK. He does not currently have any crypto holdings.