Following the loss of $93 million reported by one of its external fund managers, the Stream Finance protocol has decided to suspend all withdrawal and deposit operations. Was this a hack or a collateral consequence of the crash on October 10?
Stream Finance announces a loss of $93 million
The cryptocurrency market has not been in the best shape since the recent crash that shook its prices on October 10, leading to liquidations totaling an estimated $20 billion, a historic high. A date to remember for the rest of this article…
At the same time, some decentralized finance (DeFi) protocols are finding themselves in difficulty in the face of attacks against them, as in the recent case of Balancer earlier this week. More recently, the Stream Finance protocol has suspended all withdrawal and deposit operations following the identified loss of $93 million.
In fact, this missing amount was reportedly “disclosed by an external fund manager overseeing Stream funds,” according to a recent post on the Stream Finance account on the X network. This revelation has triggered an ongoing process of “withdrawing all liquid assets,” which should be completed shortly.
An external fund manager overseeing Stream funds has revealed the loss of approximately $93 million in assets. In response, Stream is mandating Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP to conduct a thorough investigation into the incident.
XUSD stablecoin collapses by 70%
An investigation is currently underway to determine the reasons for this situation, without providing further details. In the meantime, all withdrawals and deposits will remain suspended until information is available to “fully assess the extent and causes of the loss.”
Meanwhile, the price of Stream Finance’s XUSD stablecoin has depegged significantly, falling more than 70% from its peg to the US dollar, with the price currently hovering around $0.30 after briefly dipping below $0.25 a few hours ago.
This situation could quickly become critical, given the direct exposure of the XUSD stablecoin on numerous lending protocols on networks such as Plasma, Sonic, Avalanche, and Arbitrum, whose total debt is estimated at $285 million.
This was an opportunity for Marc Zeller, founder of the Aavechan initiative and member of the Aave protocol DAO, to explain how “October 10 caused more damage than we are willing to admit. And if you’re not just using Aave, I suggest you take a minute to investigate who your counterparty is and whether the return is worth it. I anticipate more explosions.”
The Stream Finance protocol is committed to “providing periodic updates as additional information becomes available.” At the time of writing, there was no further data available on its official X account.
