Stream Finance Faces $93 Million Loss, Launches Legal Investigation

The DeFi platform Stream Finance faced a financial setback, prompting the firm to launch an Investigation led by Perkins Coie LLP.

The firm, known for increasing capital efficiency and yield generation through innovative decentralized financial protocols, announced on X that an outside fund manager overseeing Stream funds disclosed a loss of about $93 million in the firm’s assets, prompting a suspension of deposits and withdrawals while an investigation unfolds.

In response to the unexpected loss, Stream engaged Perkins Coie LLP, a leading international law firm renowned for its expertise in corporate governance, financial investigations and regulatory enforcement.

The fintech litigation firm has assigned attorneys Keith Miller and Joseph Cutler, who are seasoned in handling internal investigations and cryptocurrency cases, to lead an in-depth investigation into the incident. CoinDesk has contacted Perkins Coie LLP for comment.

“Our decision to retain Perkins Coie LLP reflects Stream’s unwavering commitment to transparency and sound corporate governance,” Stream said on X.

Stream is currently in the process of withdrawing all liquids and expects to complete this process soon.

The company has temporarily suspended all withdrawals and deposits, with pending deposits halted until further notice. He promised to provide periodic updates as additional information becomes available and the investigation progresses.

Fall out

The massive loss in Stream Finance has raised uncertainty about how it will settle between the holders of xUSD, xBTC, xETH of the protocol and those who have lent money against these tokens.

Among these, xUSD is widely used as collateral in several loan markets curated on platforms such as Euler, Morpho and Silo, which operate on various blockchain networks, including Plasma, Arbitrum and Plume.

According to a analyst pseudonym YAMthe total of outstanding loans and loans secured by Stream-related collateral probably more than $280 million. YAM noted that this figure excludes indirect exposure, such as those involving deUSD and other intricate lending loops, and may not be entirely accurate. of USDo decentralized US Dollar, is a fully collateralized synthetic dollar, performance powered by the Elixir Network.

CoinDesk has reached out to Stream Finance via X for comment.