Stream Finance suspended deposits and withdrawals after an external fund manager overseeing the protocol’s funds disclosed a loss of about $93m in fund assets, it said Tuesday. The team said it has retained Keith Miller and Joseph Cutler of law firm Perkins Coie to investigate the incident. “We are actively withdrawing all liquid assets and expect this process to be completed in the near term,” Stream said, adding that periodic updates will follow as more information becomes available. Until the scope and cause of the loss are known, Stream said all withdrawals and deposits will remain paused. “Any pending deposits will not be processed at this time,” the statement said. Stablecoin XUSD Plunges as Traders Rush to Exit After Loss Disclosure The announcement hit sentiment across the protocol’s ecosystem. Earlier, its staked stablecoin XUSD broke from its $1 peg, dropping as much as 58% in 24 hours. Traders pointed to heavy selling on Arbitrum-based venues as confidence slipped. The disclosure went live around 12.45 pm UTC, in a window that also saw reports of a large multichain exploit on Balancer. While the events appear unrelated, the overlap in timing amplified anxiety across pockets of DeFi and accelerated defensive positioning. Within hours, aggressive XUSD-to-USDC swaps on Camelot and Uniswap drove XUSD from $1 to $0.92. As Stream confirmed the freeze on deposits and withdrawals pending the investigation, bids thinned and the price slid further. Between 6.00 pm UTC on Nov. 3 and 2.00 am UTC on Nov. 4, liquidations and arbitrage pressure pushed XUSD to about $0.43. No Evidence of Direct Exploit, But Leverage Concerns Deepen On-chain watchers framed the slide as a trust shock rather than a confirmed smart contract failure. They noted that trading activity on Arbitrum dominated the move, with no direct evidence of a protocol exploit at the time of writing. Concerns over backing intensified on social media. One X user claimed that on-chain data showed roughly $170m in supporting assets against about $530m in outstanding loans, implying leverage above four times. Those figures could not be independently verified in real time. Stream launched in early 2024 with a pitch of capital-efficient strategies that blend DeFi and traditional market techniques. Users deposit USDC into a vault and receive XUSD, which targets yield through activities such as lending arbitrage, incentive farming and hedged market making. The protocol has also worked with external managers when internal capacity is exceeded. The model helped Stream grow quickly through 2025, but reliance on external counterparties now sits at the center of the investigationStream Finance suspended deposits and withdrawals after an external fund manager overseeing the protocol’s funds disclosed a loss of about $93m in fund assets, it said Tuesday. The team said it has retained Keith Miller and Joseph Cutler of law firm Perkins Coie to investigate the incident. “We are actively withdrawing all liquid assets and expect this process to be completed in the near term,” Stream said, adding that periodic updates will follow as more information becomes available. Until the scope and cause of the loss are known, Stream said all withdrawals and deposits will remain paused. “Any pending deposits will not be processed at this time,” the statement said. Stablecoin XUSD Plunges as Traders Rush to Exit After Loss Disclosure The announcement hit sentiment across the protocol’s ecosystem. Earlier, its staked stablecoin XUSD broke from its $1 peg, dropping as much as 58% in 24 hours. Traders pointed to heavy selling on Arbitrum-based venues as confidence slipped. The disclosure went live around 12.45 pm UTC, in a window that also saw reports of a large multichain exploit on Balancer. While the events appear unrelated, the overlap in timing amplified anxiety across pockets of DeFi and accelerated defensive positioning. Within hours, aggressive XUSD-to-USDC swaps on Camelot and Uniswap drove XUSD from $1 to $0.92. As Stream confirmed the freeze on deposits and withdrawals pending the investigation, bids thinned and the price slid further. Between 6.00 pm UTC on Nov. 3 and 2.00 am UTC on Nov. 4, liquidations and arbitrage pressure pushed XUSD to about $0.43. No Evidence of Direct Exploit, But Leverage Concerns Deepen On-chain watchers framed the slide as a trust shock rather than a confirmed smart contract failure. They noted that trading activity on Arbitrum dominated the move, with no direct evidence of a protocol exploit at the time of writing. Concerns over backing intensified on social media. One X user claimed that on-chain data showed roughly $170m in supporting assets against about $530m in outstanding loans, implying leverage above four times. Those figures could not be independently verified in real time. Stream launched in early 2024 with a pitch of capital-efficient strategies that blend DeFi and traditional market techniques. Users deposit USDC into a vault and receive XUSD, which targets yield through activities such as lending arbitrage, incentive farming and hedged market making. The protocol has also worked with external managers when internal capacity is exceeded. The model helped Stream grow quickly through 2025, but reliance on external counterparties now sits at the center of the investigation