BaFin, Ethena Set 42‑Day USDe Redemption Deadline

Germany’s financial regulator, BaFin, has reached an agreement with Ethena GmbH, the German subsidiary of Ethena Labs, to implement a 42‑day redemption window for holders of the USDe stablecoin. This resolution effectively ends months of regulatory tension between the company and authorities over compliance with the European Union’s Markets in Crypto-Assets Regulation (MiCA).

Redemption Process and Timeline

The redemption window is already in effect and will remain open until August 6. During this period, all USDe stablecoin holders in the European Union must submit their redemption requests directly to Ethena GmbH. The entire process is being overseen by a BaFin-appointed representative to ensure transparency and proper settlement of claims.

After the deadline passes on August 7, any remaining redemptions will be handled by Ethena’s offshore affiliate, Ethena (BVI) Ltd. This handover marks the formal winding down of Ethena GmbH’s business operations in Germany and across the broader EU and European Economic Area.

Background of the Regulatory Dispute

The conflict began in March, when BaFin ordered Ethena GmbH to immediately cease public issuance of the USDe stablecoin. The regulator argued that Ethena’s yield-bearing token, sUSDe, qualified as an unregistered security under European financial laws.

As a result, BaFin froze reserve assets held in Germany, blocked new users from accessing Ethena’s services, and demanded the company stop marketing or minting new tokens. These enforcement actions disrupted Ethena’s operations and forced the company to reconsider its European strategy.

By April, Ethena Labs began shutting down its German business and officially withdrew its application for MiCA authorization, signaling its intent to exit the EU market entirely. Since March 21, Ethena GmbH has neither minted nor redeemed USDe tokens in the region.

Remaining Supply and Global Circulation

Despite the suspension of activities in Germany, approximately 5.6 billion USDe tokens remain in global circulation. A large portion of this supply was issued before MiCA regulations went into effect. Ethena Labs has continued operations outside the European Union, maintaining its stablecoin services in other jurisdictions.

Next Steps and Market Impact

The 42-day redemption period is a final opportunity for EU-based holders to redeem their stablecoins under the direct supervision of BaFin. After August 6, all claims will shift to the offshore entity, which operates under a different regulatory framework.

Ethena has not clarified whether it intends to return to the European market in the future or seek fresh regulatory approvals. The firm’s exit underscores the growing challenges crypto issuers face as the EU enforces stricter standards for stablecoins and yield-bearing digital assets.