Last updated on January 3rd, 2026 at 02:58 pm
Quick Breakdown
- Stream Finance halts deposits and withdrawals after uncovering a $93M asset loss.
- Stablecoin XUSD depegs to $0.51, losing half its value amid community panic.
- The incident exposes transparency and risk issues in recursive DeFi strategies.
Stream Finance freezes funds after major asset loss
Decentralized finance platform Stream Finance has suspended all deposits and withdrawals following the discovery of a $93 million loss in assets managed by an external fund manager.
Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets.
In response, Stream is in the process of engaging Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP, to lead a comprehensive…
— Stream Finance (@StreamDefi) November 4, 2025
The project revealed in an X post on Monday that the fund manager disclosed the loss on Sunday, prompting Stream Finance to hire legal experts from Perkins Coie to investigate the incident.
“We are actively withdrawing all liquid assets and expect this process to be completed in the near term,”
the team stated, assuring users of regular updates as the probe progresses.
While the investigation continues, all pending deposits remain unprocessed, and withdrawals are on hold until further notice.
XUSD stablecoin suffers sharp depeg
Stream Finance operates a yield-generating DeFi protocol with a collateralized stablecoin, Staked Stream USD (XUSD). The token began to depeg from its $1 target even before the official announcement, dropping sharply as concerns spread among users.
Community discussions on Sunday revealed growing anxiety about the sudden pause in transactions without prior communication from the Stream Finance team. Hours before the disclosure, Labs founder Omer Goldberg had already flagged a significant depeg, linking it to an over $100 million exploit on Balancer, an automated market maker platform.
According to CoinGecko, XUSD plummeted to $0.51, reflecting a 50% decline from its intended value.
TVL controversy and transparency concerns
Just days earlier, Stream Finance had addressed questions about discrepancies in its total value locked (TVL) figures between its official website and data from DefiLlama.
In a Friday post, the project clarified that DefiLlama had chosen to exclude “recursive looping” strategies from its TVL metrics — a decision Stream Finance disputed but acknowledged by updating its reporting structure. The platform listed user deposits at around $160 million and total deployed assets at $520 million.
Commenting on the development, CoinDCX’s Head of DeFi Ecosystem Growth, Minal Thurkal, warned that the case highlights the risks tied to complex DeFi yield mechanisms and the need for greater transparency in protocol operations.
Meanwhile, Falcon Finance recently expanded its collateral options to include KAIA and USDT (Kaia), allowing users to mint its overcollateralized synthetic dollar, USDf, directly on KaiaChain.
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