Stream Finance Pauses Deposits And Withdrawals After External Fund Manager Discloses $93M Loss
Decentralized finance (DeFi) platform Stream Finance has paused withdrawals and deposits after an external fund manager overseeing its funds disclosed a $93 million loss in assets.
“Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets,” the team wrote on X.
“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 investigation into the incident,” the team added.
Perkins Coie has previously advised various fintech firms on legal, compliance and cybersecurity matters.
Stream also said it will start withdrawing all of the project’s liquid assets and expects this process “to be completed in the near term.”
Stakeholders will receive periodic updates “as additional information becomes available,” the team said.
Stream Finance’s Stablecoin Had Already Depegged Before The Disclosure
Stream Finance is a “recursive looping” yield-focused DeFi platform that also offers a collateralized stablecoin called Staked Stream USD (XUSD).
Prior to the X post by the team, the project’s stablecoin had already started to depeg below $1, which suggests that many users had sensed trouble over the weekend.
Investors also began to question why deposits and withdrawals had been paused without any communication from the team.
Ten hours before Stream Finance had posted on X, Labs founder Omer Goldberg said that XUSD had “began to depeg materially below its target range” after the automated market maker Balancer was exploited for over $100 million.
XUSD price (Source: Coingecko)
Data from CoinGecko shows that XUSD’s price has plummeted 76% in the past 24 hours. As a result, the stablecoin’s value now stands at $0.3024 per token as of 5:22 a.m. EST.
Its market cap has also plunged from over $273.3 million to around $62 million.
Questions Emerge Over Discrepancies Between Stream Finance And DefiLlama Data
In addition to the project’s stablecoin starting to depeg over the weekend, questions also began to emerge regarding a discrepancy between the Total Value Locked (TVL) that Stream Finance claimed to have and the data shown on the popular DeFi data aggregator DefiLlama.
Stream Finance currently shows on its website that it has over $455 million in assets under management. Meanwhile, DefiLlama shows that the TVL for the platform is much lower at around $97.56 million.
Stream Finance explained that the discrepancy arises from DefiLlama’s decision that recursive looping is not considered TVL according to their definition, which the project’s team disagrees with.
The team has since added an update to its, which makes a distinction between user deposits and the total assets that have been deployed across the project’s strategies.
“We have signed letters of engagement with third-party attestation companies and have shared access to our books,” the team said. “These things take time to do right, but we are moving as fast as we can to give users guarantees.”
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