**DeFi Protocol Stream Finance Halts Deposits and Withdrawals Following $93 Million Loss**
Decentralized finance (DeFi) platform Stream Finance has suspended all deposits and withdrawals after suffering a significant loss of $93 million. This incident has sparked widespread concern within the DeFi community and has led to the launch of a formal investigation into the matter.
To address the situation, Stream Finance has engaged the blockchain-focused law firm Perkins Coie LLP to conduct a comprehensive inquiry. Attorneys Keith Miller and Joseph Cutler will oversee the investigation, demonstrating the protocol’s commitment to transparency and strong governance practices.
In the meantime, the Stream Finance team is actively withdrawing all liquid assets and has pledged to keep stakeholders informed with ongoing updates. “Until we are able to fully assess the scope and causes of the loss, all withdrawals and deposits will be temporarily suspended. Any pending deposits will not be processed at this time,” the platform stated.
### Impact on Stablecoin and Synthetic Tokens
Following the disclosure of the loss, Stream Finance’s native stablecoin, StakedStreamUSD (XUSD), lost its peg and plunged to approximately $0.50. This depegging has heightened user concerns, affecting not only XUSD holders but also holders of other synthetic tokens under the Stream umbrella, such as xBTC and xETH.
The sudden freeze has alarmed market participants and investors who rely on the protocol for trading and long-term asset holdings, as they are currently unable to access their funds.
### Estimated Debt and Broader Market Implications
A pseudonymous analyst known as YAM highlighted the potential far-reaching effects of this event. YAM pointed out the complexities involved in settling claims among holders of xUSD, xBTC, xETH, as well as lenders collateralized by these tokens.
Moreover, YAM warned of indirect exposure through other stablecoin vaults like Elixir’s deUSD and Treeve’s scUSD. According to the analyst’s estimates, the total outstanding debt tied to Stream assets may exceed $280 million, not including additional exposure through interconnected lending platforms.
Protocols that could potentially be affected include Euler, Morpho, and Silo, among others, all of which maintain lending markets linked to Stream tokens. Typically, users deposited USDC in exchange for XUSD, designed to provide stable returns.
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The Stream Finance incident underscores the risks associated with interconnected DeFi protocols and highlights the importance of transparency and robust risk management in the space. Stakeholders and market observers will be watching closely as the investigation progresses and more details emerge.
https://crypto.news/stream-finance-suspends-withdrawals-following-93m-loss-launches-investigation/