The German Federal Financial Supervisory Authority (BaFin) has ordered Ethena GmbH to cease operations involving its USDe crypto token, citing serious deficiencies found during the approval process. The token issuance required authorization, which the company failed to secure.
On April 14, 2025, BaFin directed Ethena GmbH, based in Frankfurt, to halt its unauthorized issuance of the USDe token after the company withdrew its application for authorization under the Markets in Crypto-Assets Regulation (MiCAR). Ethena is now required to reverse its operations and redeem USDe tokens under BaFin’s supervision. The company had been offering an asset-referenced token tied to the U.S. dollar through crypto-backed reserves and derivatives but did not meet MiCAR compliance during the authorization process. BaFin identified significant organizational deficiencies and imposed a €600,000 fine along with a payment and sales ban. Although the order is enforceable, Ethena filed an objection on April 22.
The German Crypto Markets Supervision Act (KMAG), effective from December 27, 2024, introduces regulatory measures for overseeing crypto markets in Germany. It emphasizes market transparency, operational resilience, and compliance with European crypto regulations. KMAG mandates that crypto service providers secure licenses, maintain robust systems, and ensure transparent practices within the sector. This framework aims to support secure and compliant market operations in alignment with EU standards.
According to the European Union, MiCA establishes uniform rules for crypto-asset issuers and service providers not covered by existing EU laws. It seeks to ensure transparency, consumer protection, and market stability with specific obligations for different types of crypto-assets, including e-money and asset-referenced tokens. The regulation became effective on December 30, 2024, including provisions on governance, disclosure, and preventing market abuse with oversight by EU authorities like the European Banking Authority (EBA) and European Securities and Markets Authority (ESMA).
BaFin oversees the stability and integrity of Germany’s financial system by supervising banks, financial services institutions, payment institutions, e-money institutions, insurers, asset managers, among others. Its responsibilities include solvency supervision and ensuring fair market conditions while preventing misuse for money laundering or terrorist financing.
