Ethena Labs, creator of synthetic stablecoins, is shutting down its operations in Germany after regulators detected "deficiencies" in its USDe stablecoin, which is pegged to the dollar.
The move highlights the increasing scrutiny of crypto assets in Germany.
The company has reached an agreement with Germany's Federal Financial Supervisory Authority, BaFin, to close its local subsidiary, Ethena GmbH, it announced on April 15.
The company clarified that since March 21, when BaFin halted stablecoin activities, Ethena's German subsidiary has not minted or redeemed USDe. At that time, BaFin identified compliance issues and potential securities law violations related to USDe.