Stream Finance suspends deposits and withdrawals after $93M Stream Fund assets loss

Stream Finance has reported that an external fund manager under its umbrella has disclosed a $93 million loss in Stream Fund assets. The loss prompted the DeFi protocol to temporarily suspend deposits and withdrawals until the investigations, led by attorneys from Perkins Coie LLP, are completed. 

Stream Finance, which runs DeFi strategies, has also declared that it will withdraw all liquid assets pending the investigation. The news led to the company’s Staked Stream USD (XUSD) continuing to fall sharply, from $0.86 to $0.30, before further plunging to $0.24, according to Coingecko’s XUSD chart.

The XUSD has lost approximately 76% of its value in the past 24 hours, and roughly 72.09% since Stream Finance’s announcement this morning. It is currently trading at $0.28 as of the time of publication.

The company stated that it expects the investigations to be concluded soon, with a commitment to keep stakeholders informed. Periodic updates will be provided as and when new information becomes available. The DeFi protocol emphasized that any pending deposits and withdrawals will also not be processed before the investigation is closed. It has frozen over $160 million in user deposits. 

Stream Finance launches legal investigations

In response to the loss disclosure, the company is engaging attorneys from Perkins Coie LLP to examine the incident and investigate the missing funds thoroughly. Stream Finance says its decision to retain Perkins Coie LLP reflects its unwavering commitment to strong corporate governance and transparency.

Concerns about the company’s accounting had reportedly surfaced days before the collapse, when a discrepancy was noted between its published TVL and DeFiLlama’s data. The difference suggested potential mismanagement, or worse, hidden leverage.  

Stream Finance’s community reportedly speculates the fund manager may have used customer deposits for risky investments. Meanwhile, the protocol has not shared any evidence of a hack or external malicious attacks, suggesting the problem may have been internal, stemming from poor risk controls, human error, or unauthorized trading.  

The protocol offers users yield farming opportunities via access to market-making services and delta-neutral strategies. Operations focus on trading through DeFi solutions and DEX, and users may incur performance fees of up to 10%. However, DeFiLlama’s data shows that its TVL (total value locked) nosedived from $204 million in late October to roughly $98 million. 

XUSD’s depegging increases chaos across the industry

PeckShield flagged the depegged XUSD first, noting that the XUSD had deviated from its peg by over 60%. The stablecoin’s depegging has reportedly caused ripples throughout the industry, especially for the Euler crypto lending protocol. There are concerns that the protocol’s oracle may not have been updated on time after the depegging, potentially leading to bad debt. The deviation currently fluctuates between 60% and 70%, as per Coingecko data. 

Stream Finance is reportedly the second yield-focused DeFi protocol to encounter major issues in just 24 hours, following Balancer’s loss of over $100 million to hackers. Nansen analysts were among the first to flag the exploit that transferred wstETH, WETH, and osETH to an unknown account for several hours.

Meanwhile, the co-founder and CEO of Trading Strategy, Mikko Ohtamaa, suggested that a faulty smart-contract check was to blame. He pointed out that concurrent transactions were altering internal balance accounting.

A recent PeckShield report also revealed that 20 major DeFi platforms were exploited in September alone, leading to a collective loss of over $127 million. However, September’s loss across DeFi platforms represents a 22% decline from August’s loss of $163 million. Meanwhile, total DeFi-related losses in 2025 amount to slightly over $3 billion, with the Bunni DEX being one of the adversely affected casualties.

Bunni completely shut down after reportedly losing over $8 million to hackers, which left the company unable to cover new security audit costs. The DEX, however, announced that its users can still withdraw their assets. Token holders will get the remaining treasury funds.

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