The Federal Financial Supervisory Authority (BaFin) has announced the prohibition of Ethena GmbH from offering its USDe token, citing deficiencies in the authorization process. The announcement was made public through a news release on March 21.
According to BaFin, the regulatory body has taken action against Ethena GmbH by halting its USDe token offering due to significant flaws in the authorization process. The authority has ordered the company to freeze its asset reserves and appointed a special representative to oversee compliance. BaFin suspects that Ethena GmbH is offering securities to the public in Germany without the necessary prospectus and is considering further supervisory measures, including restricting the public offering of these securities.
Ethena GmbH, based in Frankfurt, issued the USDe token as an asset-referenced token, claiming it maintains its value through a stable reference to the US dollar. The company has been operating under a transitional provision of the Markets in Crypto-Assets Regulation (MiCAR), which allows it to continue offering tokens in Germany until its authorization process is complete. However, BaFin has identified violations of MiCAR regulations, including issues with reserve assets and compliance requirements. As a result, the company faces restrictions such as freezing of assets and limitations on its management’s authority.
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BaFin has also issued a warning regarding EmexFunding, suspecting that it offers financial, investment, and crypto asset services without necessary authorization. The company claims operations under EmexFunding GmbH with a registered office in Corby, United Kingdom; however, no such entity exists. EmexFunding GmbH reportedly encourages consumers to take out loans for trading financial instruments and crypto assets through a document called a "Handelskreditvertrag," according to BaFin's news release.
