Following the $93 million loss 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 effect 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 prices on October 10, triggering liquidations totaling an estimated record $20 billion. A date to keep in mind for the rest of this article…
At the same time, certain decentralized finance (DeFi) protocols are facing difficulties due to 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’s funds,” according to a recent post by the Stream Finance account on X. This revelation triggered an ongoing process to “withdraw all liquid assets,” which is expected to be completed shortly.
An external fund manager overseeing the Stream funds revealed the loss of approximately $93 million in assets. In response, Stream is engaging Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP to lead a thorough investigation into the incident.
The XUSD stablecoin crashes by 70%
An investigation is currently underway to determine the reasons behind this situation, without providing further details. In the meantime, all withdrawals and deposits will remain suspended until information becomes available that allows for “a full assessment of the extent and causes of the loss.”
Meanwhile, the price of Stream Finance’s XUSD stablecoin has experienced a significant depeg of over 70% from its USD peg, currently trading around $0.30, after briefly dipping below $0.25 a few hours ago.
The XUSD stablecoin depegs and crashes by 70%
This situation could quickly become critical, given the XUSD stablecoin’s direct exposure across numerous lending protocols on networks such as Plasma, Sonic, Avalanche, and Arbitrum, whose combined debt is estimated at $285 million.
This prompted Marc Zeller, founder of the Aavechan initiative and member of the Aave protocol’s DAO, to explain how “October 10 caused more damage than we’re 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 yield is worth it—I anticipate more blowups.”
The Stream Finance protocol is committed to “providing periodic updates as additional information becomes available.” At the time of writing, no further data was available on its official X account.
