DeFi platform Stream Finance has faced a financial setback, prompting the company to launch an investigation led by Perkins Coie LLP.
The firm, known for increasing capital efficiency and generating returns through innovative decentralized finance protocols, announced to X that an external fund manager overseeing Stream funds revealed a loss of approximately $93 million in the firm’s assets, prompting a suspension of deposits and withdrawals as an investigation unfolds.
In response to the unexpected loss, Stream has engaged Perkins Coie LLP, a leading international law firm known for its expertise in corporate governance, financial investigations and regulatory enforcement.
The fintech litigation firm has assigned attorneys Keith Miller and Joseph Cutler, experienced in handling internal investigations and cryptocurrency-related cases, to lead a thorough investigation into the incident. CoinDesk contacted Perkins Coie LLP for comment.
“Our decision to retain Perkins Coie LLP reflects Stream’s unwavering commitment to transparency and robust corporate governance,” Stream said at X.
Stream is currently in the process of withdrawing all liquid assets and expects to complete this process shortly.
The company has temporarily suspended all withdrawals and deposits, with pending deposits stalled until further notice. It has promised to provide periodic updates as additional information becomes available and the investigation progresses.
Fallout
The massive loss at Stream Finance has created uncertainty about how it will be settled between the protocol’s xUSD, xBTC, xETH holders and those who have borrowed money against these tokens.
Among these, xUSD is widely used as collateral in several curated cross-platform loan markets such as Euler, Morpho, and Silo that operate on various blockchain networks, including Plasma, Arbitrum, and Plume.
According to a pseudonymous analyst YAM, total outstanding loans and loans secured by Stream-related collateral likely exceed $280 million. YAM noted that this figure excludes indirect exposures, such as those involving deUSD and other convoluted lending loops, and may not be entirely accurate. deUSDor decentralized US Dollar, is a fully secured, return-bearing synthetic dollar powered by the Elixir Network.
CoinDesk contacted Stream Finance via X for comment.
