• Ethena Closes German Operations, Abandons MiCAR License Pursuit.
• USDe Activities Centralized Under Ethena (BVI) Limited.
• Ethena GmbH No Longer Services Whitelisted Users.

Ethena Labs has officially concluded its operations in Germany and is no longer proceeding with its application for a MiCAR license. This decision follows closely on the heels of the company’s move to transfer its stablecoin operations to its subsidiary in the British Virgin Islands (BVI) just weeks prior. This strategic shift from Ethena highlights a growing unease within the crypto industry regarding Europe’s increasingly stringent regulatory landscape.

Why Did Ethena Labs Exit Germany and Drop MiCAR License?

The entity responsible for the USDe stablecoin has reached a mutual agreement with BaFin, Germany’s financial regulatory authority, to close down its German subsidiary, Ethena GmbH.

In a recent announcement on X, Ethena clarified that the German entity ceased all minting and redemption of USDe as of March 21. Since then, Ethena (BVI) Limited has taken over complete operational responsibility, ensuring all activities continue smoothly without interruption.

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In their official statement, the crypto firm further explained that all users previously whitelisted under the German entity have been successfully transitioned to the BVI-based platform upon their request. Consequently, Ethena GmbH is now without direct clients or ongoing business operations.

While Ethena hasn’t explicitly stated their reasons, industry experts suggest that MiCAR’s demanding compliance requirements are likely a major factor deterring companies that prioritize agility, flexibility, and user privacy.

How Strict is Europe’s MiCAR Regulation Proving to Be?

Ethena’s departure is part of a wider trend where crypto businesses are re-evaluating their European strategies as MiCAR enforcement draws nearer.

The challenges of meeting MiCAR’s requirements are further underscored by Circle executive Patrick Hansen, who pointed to ESMA statistics up to April 14. These figures indicate that only a mere 11 stablecoin issuers and 15 crypto-asset service providers (CASPs) have secured MiCA licenses across the entire European Economic Area (EEA).

Related: Ethena USDe Stablecoin Jumps 72%—Is Tether’s Market Dominance at Risk?

Hansen emphasized that without a MiCA license, crypto firms are barred from offering their services across the 30 nations within the European Economic Area (EEA).

Adding to the evidence of stricter enforcement, Italy’s financial regulator, CONSOB, recently added 15 entities to its list of non-compliant operators under the new regulatory framework.