Stream Finance Halts Operations After Discovering $93M Loss

Stream Finance has halted all deposits and withdrawals after an external fund manager reported a $93 million shortfall in assets over the weekend. The team said on Monday it hired Perkins Coie to lead an independent investigation and is unwinding positions to recover all liquid assets. Users were told to expect periodic updates while transfers remain suspended and pending deposits are not being processed.

The platform, known for recursive looping strategies aimed at boosting yield, also issues a collateralized stablecoin called Staked Stream USD (XUSD). Community members flagged problems on Sunday as activity slowed with no explanation. By the time the team posted, XUSD had already slipped well below its one dollar target. Industry commentary linked the slide to broader stress after a nine-figure exploit at automated market maker Balancer. According to market data, XUSD later traded as low as $0.51, intensifying user anxiety and prompting rapid flight from risk.

The pause follows a public dispute over how the project reports size. On Friday, Stream Finance said DefiLlama excludes recursive looping from its total value locked metric. To remain transparent, the project’s site now separates user deposits, cited at roughly $160 million, from total assets deployed across strategies, listed near $520 million. The differing figures added to confusion as the platform shifted into emergency mode, and questions mounted about leverage, liquidity, and counterparty exposure.

DeFi risk specialists say the episode underscores that high yields often rely on leverage and complex feedback loops that can fail under stress. They advise users to examine how protocols generate returns, what assets back any associated stablecoins, and whether reported TVL aligns with independent trackers. For now, Stream Finance’s priority is asset recovery, clarity on the source of the loss, and a path to restore normal operations while communicating findings to affected users.