Ethena Labs announced on Wednesday that the Federal Financial Supervisory Authority of Germany (BaFin) has reached an agreement with the company's German branch, Ethena GmbH, regarding the redemption plan for USDe stablecoin holders.
The regulatory authority stated that a 42-day redemption process for stablecoin holders has been initiated. BaFin indicated that USDe holders can submit redemption requests directly to Ethena GmbH until August 6. This process will be overseen by a special representative appointed by BaFin.
After the deadline, Ethena GmbH will be considered officially liquidated in Germany, the European Union, and the European Economic Area (EEA). This means that from August 7, any claims should be made through the company's offshore affiliate, Ethena (BVI) Ltd.
Ethena Labs stated that once the redemption plan is fully implemented, Ethena GmbH will no longer have "outstanding issues related to operations concerning USDe." However, the company did not indicate whether it plans to re-enter the EU and EEA markets.
This announcement comes after a four-month conflict between Ethena and the German financial regulator. On March 21, BaFin prohibited Ethena GmbH from publicly offering its USDe stablecoin, citing violations of the EU's Markets in Crypto-Assets Regulation (MiCA).
The government agency accused the company of selling unregistered securities through the sale of yield-bearing sUSDe tokens linked to the USDe stablecoin.
The regulatory authority implemented sanctions, including freezing USDe reserve assets, shutting down the company's website and portal, and ordering the company to cease services to new users.
On April 15, Ethena Labs began to halt all operations of its German subsidiary. At that time, the company stated it would no longer pursue MiCA authorization in Germany.
The company added that since the regulatory authority took enforcement action against Ethena GmbH on March 21, its German subsidiary has not engaged in any minting or redemption activities for USDe.
Ethena GmbH applied for MiCA authorization on July 29, 2024. However, BaFin rejected the application in March on the grounds that Ethena GmbH failed to comply with regulations.
Nevertheless, nearly 5.6 billion tokens remain in circulation, most of which were issued before the MiCA framework came into effect and are distributed globally.
Related: The Bank for International Settlements (BIS) states that stablecoins do not meet the standards as currency and calls for strict limitations on their role.
Original article: “German Regulator Closes Case Against Ethena GmbH Over USDe Issuance Issues”
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