tl;dr
Ethena Labs is closing its German branch and withdrawing from EU operations following the rejection of its MiCA compliance application by German authorities. The firm has ceased all activities in Germany, with users transferred to Ethena (BVI) Limited. The rejection, which included a ban on sales of...
Ethena Labs is officially closing its German branch and exiting EU operations after its MiCA compliance application was rejected by German regulators. The ban on sales of Ethena’s USDe stablecoin in Germany severely constrained the company’s activities, leading to the wind-down of Ethena GmbH. Users previously served by the German branch have been transferred to Ethena (BVI) Limited to continue receiving services outside Germany.
The rejection of the MiCA application triggered significant price volatility for Ethena’s governance token, ENA. In early March, anticipation of regulatory approval had pushed ENA to nearly $2.5 billion in market capitalization, but after the rejection, bearish sentiment combined with broader macroeconomic pressures caused ENA’s price to decline, with a further drop of over 7% following the exit announcement.
Ethena’s experience highlights the growing challenges faced by crypto firms under the European Union’s recent Markets in Crypto-Assets (MiCA) regulation. This regulatory framework has disrupted multiple stablecoin issuers, including the delisting of Tether’s stablecoins from EU exchanges. In contrast, major centralized exchanges such as Crypto.com and OKX have successfully acquired MiCA licenses, positioning themselves strongly within the EU market.
In summary, Ethena Labs’ withdrawal from Germany and the EU underscores the intense regulatory pressures confronting crypto companies adapting to MiCA. While some players have managed to secure licenses and expand, others, like Ethena, are forced to restructure, reshaping the European crypto landscape.