German Supervisory Authority Bafin said he recognized Ethhena’s “serious shortage” in synthetic USDE stablecoin.
Ethena is the protocol that forms the yield. Stablecoin has a market cap of $ 5.4 billion.
Ethena told X that it would “continue to review alternative frameworks,” after informing that the “application under the micar regulatory framework was not approved.”
In a statementBafin said the deficiencies are associated with the “bank business organization and violations of Micar requirements, such as those about asset reserves and compliance with capital requirements.”
“Bafin also has reasonable grounds to suspect that the Ethena GMBH is offering the public to Germany security in the form of ‘Susde’ tokens of Etherna Opco. Ltd. without the required security prospectus,” the regulator said.
Ethena’s ena tokenhad’s 6.5% dropped in the past 24 hours, expanding losses following the announcement, according to CoinMarketCap Data.
