Key Highlights:
- Stream Finance discloses a $93 million loss that is linked to an external fund manager.
- The firm has frozen withdrawals and deposits temporarily.
- xUSD stablecoin depegged sharply.
An external manager, who was responsible for handling Stream’s investment funds, reported a loss of approximately $93 million. After this, Stream immediately started looking into the issue and reviewing its processes. The loss has sparked concerns about how the funds were being monitored and whether stronger controls are needed to safeguard investor money.
Investigation Underway
Stream Finance announced today, November 4, 2025, on the social media platform X (formerly known as Twitter) that it has engaged Keith Miller and Joseph Cutler from Perkins Coie LLP to carry out their independent investigations into the loss. The law firm confirmation signals Stream’s commitment to a rigorous, transparent inquiry into the events that led to the asset’s shortfall, which will include the controls in place at the time, and whether there were any potential liability or operational weaknesses.
Liquidity Actions and Temporary Suspension
In order to do damage control, Stream disclosed that it is actively withdrawing all liquid assets and expects the process to conclude in the near term. As part of this liquidity management, Stream will temporarily suspend all withdrawals and deposits. Until further notice, no deposits will be processed. The firm will provide updates as soon as they are available to share.
The decision to suspend liquidity operations is nothing but a precautionary measure until the investigation unfolds. This move is also one of the common practices within the industry when uncertain asset movements and potential fund mismanagement are detected, aiming to protect investor interests and preserve remaining capital.
Governance and Transparency Commitments
Stream emphasized once again that it wants to operate in a clear and honest way. The company said transparency and strong decision-making are very important to them, especially during such difficult times.
The company has hired Perkins Coie LLP to oversee the investigation. This move indicates that Stream wants an independent team to review everything and guide the process fairly. Stream also promised that it will keep investors and other stakeholders updated.
The company will share information regularly and provide more details as the investigation uncovers new facts.
xUSD Experiences Sharp Decline
Stream Finance’s staked stablecoin xUSD experienced a sharp depeg, falling about 22.6% within 24 hours amid the $93 million loss disclosed in Stream Fund assets. Unlike traditional stablecoins, xUSD is a highly leveraged tokenized fund product that depends on the underlying health and liquidity of Stream’s managed assets.
The depeg indicates the market panic and concerns about Stream’s leverage and liquidity risks, which are again compounded by complex recursive lending loops and limited transparency, which led to a breakdown in xUSD’s peg stability.
From this situation, it is clear that the stablecoins that are tied to such fund strategies are affected by sudden market moves. As the conditions shift, the value and the performance of these stablecoins are also affected.
Market Reaction
The reaction from the community has been divided. The majority of users consider this a wake-up call for transparency and stronger risk controls in Web3. Many believe that the incident shows that trust alone is not enough; the protocols have to prove their stability via real audits, on-chain reporting, and clear governance.
Some users highlighted that the sudden $93 million loss and the stablecoin depeg indicate how sensitive leveraged or staked stablecoin models can be when hit with adversities. The company is being criticized, and this situation is being called a failure of oversight rather than an unfortunate event.
At the same time, a few voices also applauded Stream’s quick response (pausing withdrawals and hiring a top legal team) as a sign that the company is handling the issue seriously.
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