Ethena Labs Announces New Redemption Plan for USDe Holders
On Wednesday, Ethena Labs revealed a new redemption plan for holders of the USDe stablecoin, as approved by Germany’s Federal Financial Supervisory Authority, BaFin. This initiative marks the beginning of a 42-day redemption period for stablecoin holders, who must assert their claims directly with Ethena GmbH by the August 6 deadline. BaFin will oversee the process with the help of a designated special representative.
Closure of Operations and Claims Process
After the cutoff date, Ethena GmbH is expected to officially cease operations in Germany, as well as in other European Union and EEA jurisdictions. Any claims made after August 7 should be directed to Ethena’s offshore affiliate, Ethena (BVI) Limited. Ethena Labs also confirmed that following the implementation of this redemption strategy, there will be no lingering issues linked to the company’s USDe operations in Germany, although they have not announced intentions to re-establish themselves in the EU or EEA.
Background and Regulatory Challenges
This announcement follows a tense four-month standoff between Ethena and BaFin, which had previously barred the company from offering its USDe stablecoin publicly, stating that it had breached the EU’s Markets in Crypto-Assets Regulation (MiCA). BaFin accused Ethena GmbH of distributing unregistered securities through its yield-bearing sUSDe tokens associated with USDe. As a result, the regulator imposed strict measures, including freezing USDe’s reserve funds and halting services for new clients.
Conclusion of Operations and Future Developments
The conflict escalated on April 15, when Ethena Labs decided to wind down operations of its German subsidiary, opting against pursuing MiCA authorization in Germany. They mentioned that since the regulator’s actions began on March 21, their German branch has not engaged in minting or redeeming any USDe tokens.
Attempts for regulatory approval resumed when Ethena GmbH filed for MiCA authorization on July 29, 2024, but BaFin denied the application due to ongoing compliance issues. Despite the regulatory turmoil, approximately 5.6 billion USDe tokens remain circulating globally, most of which were issued prior to the implementation of the MiCA regulations.
