Panic At Stream Finance — $93 Million Loss Forces Platform Freeze

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Stream Finance paused all deposits and withdrawals on its platform after reports disclosed that an external fund manager tied to the protocol suffered a loss of about $93 million.

According to Stream’s disclosure, the move came as the team sought time to investigate the damage and to stabilize core functions.

Operations Suspended After Major Loss

Reports have disclosed that user deposits on the protocol were roughly $160 million, while total assets that had been put to work in various strategies exceeded $520 million.

The protocol’s stable token, xUSD, lost its close tie to $1 and traded near $0.51 at one point, a sharp loss of confidence that pushed some users to pull funds off the platform.

On-chain trackers show total value locked fell from about $204 million at the end of October to near $98 million after the news spread.

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

Stream Finance: Investigation And Legal Steps

According to public notices, Stream retained Perkins Coie LLP to lead an independent review and legal work. Attorneys named include Keith Miller and Joseph Cutler, who will be involved in examining what happened and advising on next steps.

The firm’s involvement suggests that legal and forensic work will run alongside technical analysis. The exact cause of the loss has not been confirmed.

Reports list a range of possibilities — from failed trading positions managed off-chain to a bad investment decision by a third party — but no definitive root cause has been released.

Exposure And What It Could Mean For Other Platforms

Some observers warn that troubles at Stream could ripple outward because xUSD and assets tied to the protocol are used as collateral elsewhere in the DeFi ecosystem.

Liquidations or forced sales are a risk when a stable token loses its peg, and other platforms that accepted xUSD might now face sudden shortfalls.

Based on current on-chain signals, liquidations and re-pricing events are already visible in related markets.

It is too early to measure the full scope, however, and authorities or counterparties have not announced formal actions.

What To Watch Next

The investigation’s findings and any forthcoming audit from Stream or its legal team are expected to shed light on how the loss occurred.

Market observers are also keeping an eye on xUSD’s price, shifts in total value locked, and any response from protocols that use Stream’s assets as collateral.

Updates from Stream’s official channels and documents from Perkins Coie will likely provide the clearest picture of the next phase in the case.

For now, the freeze on deposits and withdrawals remains in effect as the inquiry continues.

Featured image from Unsplash, chart from TradingView

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