DeFi Protocol Ethena Exits German Market After BaFin Scrutiny

Decentralized finance protocol Ethena announced it will wind down its operations in Germany following critical feedback from BaFin, Germany's financial regulator. BaFin highlighted serious deficiencies in Ethena's USDe token, a synthetic dollar backed by assets such as BTC and ETH, and pointed out that the company was offering unapproved securities. Consequently, Ethena has decided not to pursue MiCAR authorization in Germany and will onboard its previous users to its entity in the British Virgin Islands. This move comes at a time when the protocol, which has $4.9 billion in total value locked (TVL), is witnessing a decline in its native ENA token, which has fallen by 2.88% over the past 24 hours. The decision underscores the ongoing challenges faced by DeFi platforms in navigating global regulatory environments and raises questions about future compliance and market positioning for Ethena.