Germany’s financial regulator BaFin has triggered a formal wind-up of Ethena GmbH, marking the end of a four-month standoff over the legality of the USDe stablecoin under the EU’s crypto regulations.

Starting 26 June, USDe holders in the European Union and European Economic Area have exactly 42 days to file redemption claims directly with the German arm of Ethena Labs.

After 6 August, the process will shift offshore, with any further claims to be handled by Ethena’s affiliate in the British Virgin Islands.

Ethena Labs confirmed that BaFin and Ethena GmbH had reached a mutual agreement outlining a supervised redemption plan.

Under the terms, a BaFin-appointed special representative will oversee the claim process, which concludes on 6 August.

Any user attempting to redeem after this date must approach Ethena (BVI) Ltd, signalling the final regulatory detachment of the company from its German entity.

BaFin’s statement made it clear that this 42-day window is the last opportunity for European users to resolve outstanding balances with the firm’s German subsidiary.

We are pleased to share BaFin and Ethena GmbH have agreed to a redemption plan providing holders the option to redeem USDe if they so wish. The plan was initiated via BaFin administrative order which concurrently revokes BaFin’s previous March 21 2025 order. BaFin has updated

Following this period, Ethena GmbH will be officially wound up across all jurisdictions governed by the EU and EEA frameworks.

Ethena Labs said that once the redemption process is complete, the firm will no longer have any unresolved issues linked to Ethena GmbH’s operations.

The company did not disclose whether it plans to pursue future activities within the EU crypto market.

The redemption announcement marks the conclusion of a long-running enforcement campaign that began on 21 March.

On that day, BaFin blocked Ethena GmbH from distributing its USDe stablecoin, stating that the company had breached new rules under the Markets in Crypto-Assets Regulation (MiCA), which officially took effect this year.

The watchdog also froze the company’s reserve assets, shut down its platform and prohibited onboarding of new users.

Central to the dispute was BaFin’s classification of sUSDe—Ethena’s yield-bearing token—as an unregistered security, triggering a full regulatory crackdown.

By mid-April, Ethena Labs began dismantling its German operations and announced it would no longer seek MiCA authorisation from BaFin.

The firm confirmed that no new minting or redemption of USDe had occurred through its German arm since the enforcement measures took effect.

Although BaFin has now concluded its domestic enforcement, over 5.6 billion USDe tokens still remain in circulation globally.

A large portion of these were issued before the MiCA regulatory framework came into force, complicating jurisdictional claims and limiting EU oversight.

Ethena GmbH had initially submitted its MiCA application on 29 July 2024, but BaFin formally rejected it earlier this year.

The regulator cited ongoing compliance failures and regulatory concerns as reasons behind the decision.

Ethena’s ongoing operations through its BVI entity raise questions over future regulatory coordination between EU authorities and offshore crypto issuers.

As of now, there is no official guidance on whether EU investors holding USDe outside of the current redemption window will have any further legal avenues within the European legal framework.

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