Ethena Labs’ USDe, the fourth-largest stablecoin by market cap, can no longer be offered for sale by the firm’s German subsidiary Ethena GmbH after BaFin—the country’s financial supervisory authority—identified “serious deficiencies” in the licensing approval process. 

In addition to no longer offering the Ethereum-based USDe, BaFin placed multiple supervisory measures on Ethena GmbH to protect customers, including blocking the asset reserves, blocking its website, and appointing a special representative to monitor the measures.

The regulator said that Ethena was able to offer its stablecoin by launching it just under the wire before Markets in Crypto Assets regulation, or MiCA, took effect across the European Union.

“Ethena GmbH took advantage of a transitional arrangement under the European [MiCA] regulation to enter the German market,” the BaFin release states, citing that Ethena GmbH was able to issue the asset-referenced tokens only because it applied to do so one day prior to a July 30, 2024 deadline.

By applying for authorization on July 29, Ethena GmbH was essentially grandfathered in and allowed to issue the tokens until they were granted or denied authorization. Ethena Labs said Friday that it’s pursuing other options for MiCA certification.

“Since its inception, Ethena has been exploring various options and jurisdictions when it comes to regulatory frameworks globally that would be conducive to our business,” posted Ethena Labs on X (formerly Twitter). “And as a result we have multiple entities within our structure facilitating minting and redemption. A [MiCA] authorization via Ethena GmbH was one of various options we have been pursuing.”

While holders of USDe can no longer redeem them via Ethena GmbH, the measures placed on the Ethena Labs subsidiary do not affect USDe trading on secondary markets. 

“To be clear, the decision will in no way disrupt any current listings of USDe, or minting and redemption via Ethena (BVI) Limited (which services the vast majority of our mint users), and USDe remains fully backed,” the stablecoin issuer posted.

While BaFin’s measures are not yet final, it also indicated it has suspicion that Ethena GmbH “is publicly offering securities in Germany […] without the required securities prospectus.” 

Earlier this week, Ethena Labs and Securitize announced a new Ethereum Virtual Machine-compatible blockchain that will use stablecoins for gas fees. 

The firm’s native token, ENA, is down more than 6% in the last 24 hours to $0.358, over 76% off its all-time high price.

Edited by Andrew Hayward

Trump administration officials have crafted a proposal to overhaul U.S. foreign aid programs, with a section exploring how it could make use of blockchain technology to track aid distributions and increase accountability.

The plan would rename the U.S. Agency for International Development (USAID) as the U.S. Agency for International Humanitarian Assistance and bring it directly under the Secretary of State’s authority, according to an initial report from Politico showing an internal document purportedly circulating at the State Department.

Under a section for “modernized, performance-based procurement,” the document references an initiative to secure and trace distributions “via blockchain technology” to “radically increase security, transparency, and traceability.”

The proposal comes as USAID faces an uncertain future. In January, the State Department placed the agency’s staff on administrative leave and halted payments to partner organizations, prompting legal challenges.

A federal judge has since issued a preliminary injunction against dismantling the agency, following efforts by D.O.G.E., the Department of Government Efficiency, established by Elon Musk that sought to do so.

It remains unclear who authored the document, as it appears to be scanned from a physical copy. Decrypt has reached out to the agency to learn more.

Innovation, efficiency, impact

The proposal further argues that the approach would “encourage innovation and efficiency” and focus on “tangible impact” instead of “simply completing activities and inputs.”

The blockchain implementation appears to be part of broader reforms intended to impose stricter controls on aid distribution, requiring measurable outcomes through “third-party metrics, not self-reporting.”

Congressional authorization would likely be required for major structural changes, though the document indicates some reforms could be implemented through executive action.

More broadly, the proposed overhaul limits USAID’s focus on global health, food security, and disaster response, making U.S. foreign aid initiatives leaner in terms of scope.

The document also outlines a restructured framework based on three organizational pillars—”Safer, More Prosperous, and Stronger”—led by three agencies under the Secretary of State’s direction.

The ideas resonate with existing literature on how blockchain technology could be used for public good. 

A 2018 article published in the Journal for Humanitarian Action cites core features of the technology as having the potential to “remove corruption by providing transparency as well as accountability.”

Edited by Sebastian Sinclair

Australian authorities have launched a crackdown on crypto scammers impersonating Binance, the world’s largest crypto exchange by trading volume, following a series of fraudulent attacks targeting local users. 

The Australian Federal Police, National Anti-Scam Centre, and Binance Australia are warning victims about the sophisticated scam, which exploits fake messages to steal crypto.

The AFP revealed that over 130 potential victims had been alerted as part of a proactive effort to combat the scam in a joint statement released Wednesday.

The fraudsters previously used SMS and encrypted messaging platforms to pose as Binance representatives, claiming that victims’ accounts had been breached. 

The messages, which appeared to be from legitimate existing threads with Binance, included fake verification codes and a contact phone number that led victims to an imposter hotline. 

Once they called the number, victims were advised to transfer their cryptocurrency to a “trust wallet,” controlled by the scammers.

The crypto scam was identified through Operation Firestorm, a global effort launched last year to disrupt international crime syndicates targeting Australians through digital fraud. 

The AFP worked with international law enforcement to identify the perpetrators, but once the funds were transferred, they were quickly moved through a network of wallets and laundering channels, making recovery nearly impossible.

“The AFP has worked closely with our partners at the NASC to ensure any victims in Australia targeted by these scammers were identified swiftly and given advice to help protect their cryptocurrency accounts,” AFP Commander Cybercrime Operations Graeme Marshall said in a statement..

Authorities have advised the victims of this scam to contact their bank or the crypto exchange immediately and report the incident to the police through ReportCyber, quoting reference number AFP-068. 

Binance Australia has co-operated with the local authorities to crack down on the scam while being embroiled in its own legal challenges.

In December 2024, the Australian Securities and Investments Commission (ASIC) launched legal proceedings against Binance Australia Derivatives, accusing the platform of misclassifying retail investors and denying them essential consumer protections.

The coordinated effort of the Australian authorities comes on the heels of rising concerns around crypto scams in Australia. 

Last month, the Australian Competition and Consumer Commission raised alarms about the potential impact of relaxed crypto regulations in the U.S. under President Donald Trump’s administration. 

ACCC Chair Gina Cass-Gottlieb pointed out that the U.S. government’s move to ease crypto regulation could lead to ‘horror scenarios‘ for investors.

Those fears were reflected in the ACCC’s annual scam report, which revealed Australians lost over $1.3 billion to investment scams in 2023, with crypto scams being a major contributor.

Edited by Sebastian Sinclair