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Stream Financea project of decentralized finance (DeFi), has pause user transactions after the discovery of a major financial gap.
The company announced on November 4 that it had suspended deposits and withdrawals following a report from an outside fund manager, who identified a $93 million shortfall in managed assets the day before.
In response, Stream Finance has hired legal support from the firm Perkins Coie to conduct a detailed investigation. According to a public update, the team is currently working to recover any remaining liquid assets.
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From now on, users cannot move funds in or out of the platform. All pending deposits are also on hold while the team reviews the cause of the loss.
Stream Finance is known for offering performance generating strategies that use a recursive loop. It also operates a stablecoin, Staked Stream USD (XUSD), which is backed by a guarantee.
November 2, users noticed problems before the company made any announcements. XUSD has started to lose its peg to the US dollarwhich fell below $1.
Before the official statement, Omer Goldberg, founder of Labs, published on X that XUSD had fallen below its expected value.
He linked the issue to a recent exploit that resulted in more than $100 million in losses on the Balancer automated trading protocol. How did the security breach happen? Read the full story.
