Stream Finance froze deposits and withdrawals after losing $93 million

Key points:

• The Stream Finance platform has temporarily suspended deposits and withdrawals after an external fund manager reported a loss of $93 million.
• Amid the crisis, its stablecoin Staked Stream USD (XUSD) lost its peg to the dollar and fell to $0,32
• The project team hired lawyers from Perkins Coie to investigate the incident.

According to the team, the message was received on Sunday. After that, the project hired lawyers from Perkins Coie to investigate the incident. While the investigation is ongoing, the platform will not process new deposits and has temporarily suspended withdrawals.

Source: X.com

Stream stablecoin has lost value

Stream Finance is a DeFi platform with a “recursive looping” focused on generating returns. It also issues its own stablecoin, Staked Stream USD (XUSD).

Even before Stream Finance’s official announcement, users noticed that XUSD had begun to lose its peg to the dollar. Deposit and withdrawal operations were suspended without explanation from the team.

About 10 hours before Stream Finance’s announcement, Labs founder Omer Goldberg wrote on X that XUSD had “began to depeg materially below its target range.” He attributed this to the recent hack of the automated market maker Balancer, which resulted in the theft of over $100 million.

According to CoinGecko, at the time of writing, the XUSD rate had fallen to $0,3212.

Source: CoinGecko

On Friday, Stream Finance published a response to questions from the community about the discrepancy between the total value locked (TVL) on its website and the statistics from the popular analytics resource DefiLlama.

The statement reads:

“DefiLlama has decided that recursive looping is not TVL per their own definitions. We disagree with this, but to be transparent to users the website now makes a distinction between user deposits (~$160M) and total assets deployed across strategies. (~%$520M).”

Earlier, in October, the decentralized exchange Bunni DEX, based on Uniswap v4, announced its closure. In September, the project was attacked, resulting in hackers withdrawing $8,4 million.