Ethena faces significant regulatory issues after BaFin's decision to suspend its operations due to securities law violations.
The Innovative USDe Components
USDe is a synthetic dollar created by Ethena, distinct from traditional stablecoins by using bitcoin and derivatives to maintain a stable price of $1. This approach bypasses some limitations of classic stablecoins, yet poses new regulatory challenges.
BaFin's Actions Against Ethena
According to BaFin's official statement, the regulator ordered to freeze the reserve assets backing the token, shut down the company's web portal, and halt new customer acquisition. A representative was appointed to monitor the situation with Ethena GmbH. The regulator suspects Ethena of selling securities in the form of sUSDe tokens without the required prospectus.
Regulatory and Investment Prospects for Ethena
Despite restrictions, Ethena continues to attract institutional investors. In February 2024, the company raised over $100 million to launch a new token, iUSDe. Ethena also partnered with World Liberty Financial, which purchased 500,000 ENA management tokens. MEXC announced a $20 million investment in USDe to promote stablecoin use.
Ethena's operations were suspended by BaFin due to serious violations. Nevertheless, the company continues to attract investments and is taking steps to embed its products within new regulated market structures.
