In a significant regulatory move, BaFin, the German financial supervisory authority, has prohibited all public sales of Ethena GmbH’s synthetic dollar token, USDe, citing violations of the European Union’s Markets in Crypto-Assets Regulation (MiCAR). This decision underscores the intensifying scrutiny of cryptocurrency assets and the imperative for firms operating in this sector to comply with evolving regulations.
According to BaFin’s official announcement, the regulator has mandated the freezing of reserve assets backing the USDe, ordered the cessation of new customer acquisitions, and closed down the website portal associated with the token. This decisive action stems from reasonable grounds to suspect that Ethena GmbH has been offering securities in the form of sUSDe tokens without the requisite prospectus.
“The BaFin also has reasonable grounds to suspect that Ethena GmbH in Germany sells securities in the form of sUSDe tokens from Ethena OpCo. Ltd. without the required prospectus.”
Further complicating the landscape, BaFin highlighted the interconnection between USDe and sUSDe tokens, determining that investors could exchange USDe for sUSDe tokens. This intertwining of assets adds a layer of complexity to the regulatory framework governing the issuance and trading of these tokens.
Importantly, while BaFin has imposed a ban on the primary sales and issuance of USDe, it has clarified that secondary sales of the token will remain unaffected. This distinction allows for existing holders to continue trading the token among themselves, although the original issuer faces significant operational restrictions.
This situation highlights the importance of regulatory compliance for crypto firms operating within the EU. As regulations continue to evolve, companies must ensure that their practices align with legal standards to avoid sanctions and preserve their market positions.
This is a developing story, and further information will be added as it becomes available.
