Stream Finance has temporarily suspended all deposits and withdrawals after revealing that an external fund manager overseeing its assets suffered a loss of about $93 million. The disclosure, made on Tuesday, has sent shockwaves through the protocol’s ecosystem and raised new concerns over third-party fund management in DeFi.
According to Stream’s official statement, the firm is in the process of retaining Keith Miller and Joseph Cutler of Perkins Coie LLP to conduct a full, independent investigation into the incident.
The decision to involve the prominent U.S. law firm underscores Stream’s stated commitment to “transparency and robust corporate governance.”
Stream said it is actively withdrawing all liquid assets, with the process expected to be completed soon. The protocol plans to provide periodic updates as more details emerge.
Until the scope and cause of the loss are fully assessed, however, all user deposits and withdrawals will remain paused, and any pending deposits will not be processed.
The announcement has triggered sharp volatility within the Stream ecosystem. Its staked stablecoin, XUSD, lost its $1 peg, plunging as much as 58% within 24 hours amid heavy selling pressure on Arbitrum-based trading venues.
Analysts attributed the crash to eroding confidence and cascading liquidations as traders sought to exit positions.
The news surfaced around 12:45 p.m. UTC, coinciding with reports of a separate multichain exploit on Balancer. While no direct link between the two incidents has been established, the timing amplified fear across the DeFi sector and prompted defensive moves by investors.
Stream Finance emphasized that its top priority is to secure remaining assets and restore trust among stakeholders. The outcome of the Perkins Coie investigation is expected to shed light on how the $93 million loss occurred and outline next steps for the protocol’s recovery.