Germany’s top financial regulator BaFin has officially closed its investigation into Ethena GmbH, the German arm of Ethena Labs, following a months-long dispute over its USDe stablecoin. In a move signaling the end of Ethena’s operations in Germany and the broader EU, BaFin has initiated a mandatory 42-day redemption window for USDe holders, ending on August 6.

During this period, investors can file claims for redemption directly with Ethena GmbH, under supervision by a BaFin-appointed representative. After the deadline, any further claims must go through Ethena’s offshore entity in the British Virgin Islands. The process effectively winds down Ethena GmbH across Germany, the EU, and the European Economic Area.

Ethena Labs confirmed the redemption plan and stated that once it’s completed, the company will have no remaining obligations tied to its German unit’s USDe operations. However, it did not clarify whether it plans a return to the European market.

This resolution comes after BaFin blocked Ethena GmbH in March for alleged violations of the EU’s Markets in Crypto-Assets Regulation (MiCA). The regulator accused the firm of selling unregistered securities linked to its yield-bearing sUSDe tokens and froze its reserve assets, shut down its website, and banned it from onboarding new users.

Ethena GmbH ceased operations in April and formally withdrew its pursuit of MiCA approval. Although the company had applied for a license in July 2024, BaFin rejected it in March due to compliance failures.

Despite regulatory pressure, nearly 5.6 billion USDe tokens remain in global circulation, mostly minted before MiCA rules took effect. The situation underscores the growing regulatory scrutiny on stablecoin issuers operating in the EU.