Stream Finance Suspends Withdrawals After $93 Million Loss
Stream Finance, a decentralized finance (DeFi) protocol, has suspended deposits and withdrawals after a third-party fund manager disclosed a loss of approximately $93 million in fund assets. The team announced on Tuesday that it has hired Keith Miller and Joseph Cutler of the law firm Perkins Coie to investigate the incident.
The loss was announced by an external fund manager overseeing the Stream funds, and as a result, Stream is in the process of withdrawing all cash and expects this process to be completed in the near future. Regular updates will follow as more information becomes available. According to Stream, all outstanding deposits are not being processed at this time, and withdrawals and deposits will remain suspended until the extent and cause of the loss is known.
Stablecoin XUSD Plunges as Traders Rush to Exit
The announcement had a significant impact on the protocol’s ecosystem, with the stablecoin XUSD breaking its $1 peg and falling as much as 58% in 24 hours. Traders pointed to strong selling on Arbitrum-based trading venues as confidence waned. The disclosure was made around 12:45 p.m. UTC, which also saw reports of a large multichain exploit on Balancer, although the events appear unrelated.
Aggressive XUSD to USDC swaps on Camelot and Uniswap sent XUSD rising from $1 to $0.92, and when Stream confirmed freezing deposits and withdrawals pending investigation, bids decreased and the price continued to fall. Between 6:00 p.m. UTC on November 3rd and 2:00 a.m. UTC on November 4th, liquidations and arbitrage pressure pushed XUSD to around $0.43.
No Evidence of Direct Exploit, but Leverage Concerns Deepen
On-chain observers viewed the decline as more of a confidence shock than a confirmed failure of smart contracts. They noted that trading activity on Arbitrum dominated the move and there was no direct evidence of a protocol exploit at the time of writing. Concerns about support grew on social media, with users expressing worries about the protocol’s reliance on external counterparties.
Stream launched in early 2024 with a set of capital-efficient strategies that combine DeFi and traditional market techniques. Users deposit USDC into a vault and receive XUSD, which targets returns through activities such as credit arbitrage, incentive farming, and hedged market making. The protocol’s model helped it grow rapidly through 2025, but its reliance on external counterparties is now the focus of the investigation.
As the investigation continues, users are advised to exercise caution and stay informed about the latest developments. For more information, please visit the source link.
