Stream Finance $93M Fund Loss Triggers Legal Probe, XUSD Depeg

Defi Project Stream Finance Confirms $93M Loss, Suspends Withdrawals

What happens if a highly trusted DeFi project loses millions in a single day? Stream Finance announced in its official update that one of its external fund managers reported losses totaling about $93 million; the users are in shock with big questions arising on how the funds were managed. 

In response, the company said it hired lawyers Keith Miller and Joseph Cutler from Perkins Coie LLP to investigate what went wrong. The company has put all withdrawals and deposits on hold until the completion of this investigation; pending deposits will also not be processed. The steps, Stream Finance said, have been taken to protect the user funds and bring transparency into the matter. 

Source: X (formerly Twitter) 

Company Moves to Protect Remaining Funds

Stream Finance explained that it is now withdrawing all remaining liquid assets to secure what is left of its holdings. The team said it expects this process to be completed soon. The company also promised to share regular updates as more information becomes available.

By hiring Perkins Coie LLP, one of the most respected law firms in the business, the organisation proves that it is serious about corporate governance and accountability. Still, many users have been frustrated by this sudden loss and wonder whether their investments are safe.

XUSD Depegs After the Crisis

Making matters worse, PeckShieldAlert reported that Stream USD (XUSD), a flagship stablecoin in the Stream Finance ecosystem, has fallen off its peg by about 58%. 

Source: X (formerly Twitter) 

According to data, even as XUSD maintains a backing of some $170 million in assets, outstanding loans against it stand at $530 million, meaning over four times leverage. This huge imbalance has raised fears of a larger liquidity problem within Stream. 

Community Reaction and Industry Concerns

The crypto community was quick to respond. Many believe that the $93 million loss is a reminder that trust means nothing without transparency. Some critics said this incident wasn't just bad luck but rather evidence of deeper negligence in DeFi fund management. 

Others have said that risk management should be at the core of every crypto project. "DeFi keeps failing because it treats risk like an option, not a rule," as one user commented. The situation with the platform has renewed calls for real audits, open data, and closer oversight of Decentralised Finance.

Another Defi mishap that made headlines in the crypto industry was the Balancer hack where around $120,000 million in crypto has been stolen. 

What This Means for Crypto

The loss of Stream Finance points out how fragile DeFi can be in the event of a failure in transparency and control. While blockchain technology promises openness, human error and weak management still lead to massive losses. For now, investors must wait for the investigation to unfold, but the message is clear: DeFi must build on code-level truth, not promises.