PANews reported on March 21 that according to an announcement on BaFin’s official website, the German Financial Supervisory Authority BaFin has stopped Ethena GmbH’s new business of issuing USDe stablecoins in Germany on the grounds that it had major organizational deficiencies and compliance violations in the MiCAR licensing process, including improper asset reserve management and failure to meet capital requirements.

BaFin has taken the following measures: freezing Ethena GmbH’s asset reserves, restricting management’s disposal rights over assets, shutting down relevant functions on its official website, and appointing specialists to supervise the implementation. In addition, BaFin also suspects that Ethena GmbH illegally publicly sold sUSDe security tokens without providing the necessary prospectus.

Currently, Ethena GmbH customers are temporarily unable to redeem USDe tokens, but secondary market trading is not restricted. As of now, there are about 5.4 billion USDe tokens in circulation. BaFin will continue to evaluate whether to completely reject its compliance license application under MiCAR.