German regulator BaFin finds 'flaws' in Ethena's USDe stablecoin

German regulator finds 'flaws' in Ethena's USDe stablecoin

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

Oliver Knight | Edited by Sheldon Rebeck on March 21, 2025, 15:52 UTC

Key points:

• Germany's financial regulator BaFin has reported shortcomings in the bank's business organisation and non-compliance with MiCA requirements.
• Ethena has announced its intention to seek alternative regulatory frameworks.
• Over the past 24 hours, the price of ENA has fallen by 6.5%.

German financial watchdog BaFin has reported finding “serious flaws” in Ethena’s USDe synthetic stablecoin.

Ethena is a protocol that generates income. The stablecoin has a market cap of $5.4 billion.

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In an interview on Platform X, Ethena said it would “continue to consider alternative frameworks” after receiving notice that “an application under the MiCAR regulatory framework will not be approved.”

In a statement, BaFin said the deficiencies relate to “the organisation of the banking business and non-compliance with MiCAR requirements, including asset reserve requirements and capital requirements.”

“BaFin also has reasonable grounds to suspect that Ethena GmbH is publicly offering securities in Germany in the form of the 'sUSDe' tokens of Ethena OpCo. Ltd. without the required prospectus,” the regulator noted.

Ethena's ENA token has lost 6.5% in the past 24 hours, according to CoinMarketCap data, adding to losses since the announcement.

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