Ethena Labs announced on Wednesday that the German Federal Financial Supervisory Authority, BaFin, and Ethena GmbH, the company’s German arm, have agreed on a redemption plan for USDe stablecoin holders.
The regulator said it had initiated a 42-day redemption process for stablecoin holders. BaFin said USDe holders will have until Aug. 6 to declare redemption claims directly against Ethena GmbH. The process will be supervised by a special representative appointed by BaFin.
After the deadline, Ethena GmbH will be deemed officially wound up within Germany, the European Union and the European Economic Area (EEA). This means that any claims from Aug. 7 onward should be made through the company’s offshore affiliate, Ethena (BVI) Ltd.
Ethena Labs said that after the redemption plan is fully implemented, Ethena GmbH will have no “outstanding issues related to Ethena GmbH’s USDe-related operations.” However, the company did not indicate whether it had plans to re-enter the EU and EEA markets.
BaFin concludes four-month conflict with Ethena GmbH
The news comes after a four-month conflict between Ethena and the German financial regulator. On March 21, BaFin barred 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 its yield-bearing sUSDe tokens, which are linked to the USDe stablecoin.
The regulator enforced sanctions, including freezing USDe reserve assets, closing the company’s website and portal and ordering the company to stop offering services to new users.
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On April 15, Ethena Labs began to cease all operations of its German subsidiary. At the time, the company said it would no longer pursue its MiCA authorization in Germany.
The company added that its German subsidiary had not conducted any minting or redemption activities for USDe since March 21, when the regulator applied its enforcement actions on Ethena GmbH.
Ethena GmbH applied for the MiCA authorization on July 29, 2024. However, BaFin rejected the application in March, citing compliance failures from Ethena GmbH.
Despite this, nearly 5.6 billion tokens remain in circulation, most of which were issued before the MiCA framework took effect and are located around the globe.
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