Ethena Exits Germany Amid Regulatory Crackdown

Ethena, a popular decentralized finance (DeFi) platform, is leaving Germany. Following pressure from German regulators, the company has officially announced it will shut down all operations in the country. Ethena decided BaFin, Germany’s financial watchdog, flagged major issues with its stablecoin, USDe . The company will now focus on its branch in the British Virgin Islands instead. Why is Ethena Leaving Germany BaFin said Ethena offered crypto products in Germany three weeks ago without proper approval. It also found big problems with Ethena’s USDe token, which is meant to act like a digital dollar. BaFin said there were serious issues with how the digital token worked. In response, Ethena agreed to close its operations in Germany. The company also said it would no longer try to get a license under the EU’s new crypto rules, called Markets in Crypto-Assets Regulation (MiCAR). These rules are meant to protect users by forcing crypto companies to follow stricter laws. Ethena’s exit from Germany is not in isolation. Many crypto firms are facing pressure from regulators in Europe and other parts of the world. The new MiCAR rules in the EU are making it harder for DeFi platforms to operate without clear rules and licenses. Some companies are choosing to move to countries with less strict regulations. Users To Shift to Ethena’s BVI Arm While Ethena is closing its German branch, it is not completely closing. Users who previously signed up under its German branch will now be moved to Ethena BVI, the company’s base in the British Virgin Islands. This move will help Ethena continue its operations under a different legal framework. Ethena is known for helping users earn rewards by locking up their crypto assets. It currently holds $4.9 billion in total value locked (TVL), making it one of the largest protocols in the space. Its USDe token acts like a stablecoin and is designed to stay close to the value of the U.S. dollar. It is backed by popular assets such as Bitcoin (BTC) and Ethereum (ETH). Market Reaction The news has not been good for Ethena’s ENA token. According to data from CoinMarketCap, in the last 24 hours, ENA dropped by 2.88%, while the broader crypto market climbed by 1.17%. Investors may be reacting to the uncertainty created by Ethena’s regulatory troubles. The post Ethena Exits Germany Amid Regulatory Crackdown appeared first on TheCoinrise.com .

Source: The Coin Rise