Stream Finance Loses $93 Million as Stablecoin Crashes to 50 Cents

TLDR

• Stream Finance discovered a $93 million loss in its assets reported by an external fund manager on Sunday
• The DeFi platform has suspended all deposits and withdrawals while investigating the incident
• Law firm Perkins Coie has been hired to lead the investigation into the missing funds
• Stream’s stablecoin XUSD has depegged to $0.51, losing half its value
• Over $280 million in loans across multiple platforms use Stream-related tokens as collateral

Stream Finance stopped all platform operations on Monday after an external fund manager reported a $93 million loss in assets. The decentralized finance platform announced the suspension on X.

The fund manager disclosed the loss on Sunday. Stream Finance immediately hired attorneys from law firm Perkins Coie to investigate what happened.

Keith Miller and Joseph Cutler from Perkins Coie will lead the investigation. Both attorneys have experience with cryptocurrency cases and internal corporate investigations.

Stream Finance is withdrawing all liquid assets from its systems. The company said this process will be completed soon.

All withdrawals are currently suspended. Pending deposits will not be processed until further notice.

The platform’s stablecoin, Staked Stream USD (XUSD), has lost half its value. XUSD dropped to $0.51 according to CoinGecko data.

Users noticed problems before Stream Finance made its announcement. Deposits and withdrawals were paused on Sunday without explanation from the team.

Concerns About Collateral Exposure

XUSD is used as collateral across multiple lending platforms. These platforms include Euler, Morpho, and Silo on blockchain networks like Plasma, Arbitrum, and Plume.

Analyst YAM estimates over $280 million in loans use Stream-related tokens as collateral. This figure does not include indirect exposures through other lending systems.

Stream Finance operates as a recursive looping platform focused on generating yield. The platform disagreed with DefiLlama about how to count its total value locked.

On Friday, Stream Finance addressed questions about TVL discrepancies. The platform showed user deposits of approximately $160 million and total assets of $520 million across strategies.

Investigation Timeline

The company promised to provide regular updates as the investigation continues. Stream Finance emphasized its commitment to transparency in its X announcement.

Perkins Coie was selected for its expertise in corporate governance and financial investigations. The firm handles regulatory enforcement cases.

Stream Finance is working to secure remaining liquid assets. The team said the withdrawal process for these assets will finish in the near term.

The loss occurred while an external fund manager was overseeing Stream’s funds. The manager reported the discrepancy to Stream Finance on Sunday.

Stream Finance has not provided details about how the loss occurred. The investigation will determine what happened to the missing $93 million.

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