The German financial regulators rejected the request from Ethena Labs Mica. The regulator ordered Ethena to stop EU operations, freeze its asset reserves and prohibit any new service. The regulators claim that the USDE of Ethena will not be considered as unregistered titles.
Although the USDE did not receive approval from mica before, its request was submitted before the deadline of July 2024. Consequently, Ethena was authorized to offer USDE services until a decision was made.
Will EU exchanges put the USDE of Ethena?
Ethena Labs, the transmitter of the Stablecoin Usde, is different from traditional stables in a few key ways. He supernoed this asset a “synthetic dollar”, correlating it with the USD by financial derivatives and algorithmic mechanisms instead of an ankle.
However, the German financial authorities challenged this and made a closing statement Ethena GmbH, his EU branch.
“The German financial supervision authority Bafin has identified serious shortcomings in the authorization process of the USDE tokens of Ethena GmbH and ordered immediate action. Among other things, Bafin prohibited Ethena GmbH from offering her USDE token to the public more and asked the company to ensure that the corresponding agitation is frozen by the Custodians, “he said.
More specifically, German regulators have some different problems with Ethena’s business practices. Many of them deal with Mica, the new EU stable regulations.
Ethena Labs has no mica approval, but her GmbH spin-off submitted a demand early enough to be accelerated. Today, regulators have found “serious gaps” in the approval process.
The German financial authorities said that Ethena GmbH did not comply with Mica rules concerning stable reserves or capital requirements. They also suspect that the company offers titles without the necessary prospectus.
To remedy this, they asked Ethena GmbH to close business with new EU customers and not to receive its active reserve.
Ethena Labs quickly responded with her own declaration. He said that Ethena GmbH, her main German office, is one of the “options and jurisdictions” she explored for a global strategy.
Although he was disappointed with this decision, he will continue to explore other options, in particular through offices other than Ethena GmbH.
“To be clear, the decision will not disturb the current lists of the USDE, or the strike and buyout via Ethena (BVI) Limited (which serves the vast majority of our mint users). Unlike reports, no assets have been “frozen” and all of them remain available for the award. We will revise our conditions accordingly ”, Sena Labs indicated.
Despite its impressive successes, the USDE token of Enthena Labs has many serious opponents. Since its stablecoin has no traditional ankle, criticism fear that some faults in its reserve measures can collapse.
With this decision, the EU exchanges will probably be forced to set up the USDE of Statehena, a bit like what happened to the USDT attachment.
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