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News

BaFin Rejects Ethena’s MiCAR Compliance Application

3 mins mins
Key Points:

  • BaFin’s rejection impacts Ethena’s regulatory compliance aims.
  • Ethena’s services remain operational; future planning is ongoing.
  • Market unaffected as USDe stays fully backed and accessible.

bafins-rejection-and-its-impact-on-ethenas-regulatory-compliance
BaFin’s Rejection and Its Impact on Ethena’s Regulatory Compliance

Ethena, known for its stablecoin USDe, was informed by Germany’s BaFin on March 21 that its MiCAR compliance application will not be approved. The decision stems from regulatory concerns impacting Ethena GmbH in Frankfurt.

While the decision has regulatory significance, USDe’s operations remain unaffected. Ethena plans to explore other regulatory options, as outlined in their USDE regulatory compliance solutions and revise its terms of service shortly.

BaFin’s Rejection and Its Operational Impact

Ethena GmbH received notification from BaFin, the financial regulatory authority in Germany, about the rejection of its MiCAR compliance application. The Frankfurt-based entity confirmed the application’s status on March 21, which specifically affects their regulatory alignment within Germany.

The BaFin rejection does not impact the exchange operations related to USDe, a stablecoin underpinned by assets. This includes the minting and redemption services offered by Ethena (BVI) Limited, based in the British Virgin Islands. Ethena is actively considering alternative pathways to secure compliance, intending to modify their terms of service within the following week.

Community feedback to BaFin’s decision indicates a measured response, with Ethena emphasizing commitment to fully backed operations. The decision, while significant, does not disrupt the normal processes for most users or interfere with USDe’s liquidity and operational accessibility.

Ethena’s Market Standing and Expert Perspectives

Did you know?

Ethena USDe, ranked as the 25th largest cryptocurrency by market cap, maintains its stability with fully asset-backed reserves even after Germany’s BaFin decision. This stability is crucial for user confidence in regulatory challenging times. CoinMarketCap data indicates the Ethena USDe’s current market cap is $5.41 billion, with a trading price of $0.999 per token. Trading volume over the past 24 hours reached approximately $94 million, with a slight decline of 2.17% in volume. The circulating supply remains at over 5.41 billion tokens, with no reported maximum limit. The stablecoin has shown a minimal price decline of 0.74% over the past day, maintaining its peg close to 1 US dollar.

Experts suggest that regulatory hurdles like BaFin’s rejection prompt cryptocurrencies to reassess compliance strategies and operational dependencies locally and abroad. As expressed by Dr. Anna Schmidt, Head of Legal at BaFin, “The halt on Ethena’s issuance of USDe tokens reflects our ongoing commitment to enforcing compliance and protecting investors.” Such regulatory actions often lead cryptocurrency firms to intensify focus on technological scalability to sustain market operations across jurisdictions.

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Avatar of Mayowa Adebajo

Mayowa Adebajo

21 March 2025, 15:58:42 GMT +0000

Mayowa is a seasoned freelance writer specializing in creating compelling, high-converting content across diverse industries.

With extensive experience working with major news outlets, personal blogs, and private clients, he brings a deep understanding of audience engagement and storytelling. His expertise spans SEO optimization, persuasive copywriting, and niche versatility, ensuring content that resonates and delivers results.

Armed with a strong command of the English language and a keen eye for detail, he crafts content that is both impactful and strategically tailored to meet client goals.

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