Ethena Labs, a synthetic stablecoin developer, is winding down its operations in Germany after the German financial regulator, BaFin, identified compliance issues with its dollar-pegged USDe stablecoin. BaFin froze USDe's token offerings in March 2025 due to alleged breaches of compliance and potential securities law violations. Following an agreement with BaFin, Ethena will cease all operations of its subsidiary, Ethena GmbH, and will no longer pursue MiCAR authorization in Germany. The company confirmed that it has not conducted any minting or redeeming of USDe since March 21. Users previously interacting with Ethena GmbH have since been transferred to Ethena (BVI) Limited with no remaining connection to the German entity. Ethena's USDe utilizes a delta-hedging strategy to maintain its dollar peg and is the fourth-largest stablecoin, with a total circulating value of $4.9 billion, as regulatory scrutiny increases across Europe.

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