Stream Finance Suspends Withdrawals Following $93M Asset Loss

Stream Finance Incident:

On November 3, Stream Finance suspended all withdrawals and deposits after an external fund manager reported a $93 million loss in company assets.
The platform engaged attorneys from Perkins Coie LLP to investigate the incident.
Stream Finance is withdrawing liquid assets but has not provided a timeline for resuming normal operations.

Suspicious Growth Pattern:

The xUSD vault grew from $40 million to nearly $400 million with a constant 15% yield, raising concerns about artificially set returns.
xUSD depegged by 25% following the announcement but partially recovered later.
No comprehensive Proof of Reserve or transparency dashboard is maintained by Stream Finance; instead, they rely on Debank bundle disclosures.

Contagion Risk in DeFi Protocols:

Approximately $284.96 million in loans are secured by Stream’s xUSD, xBTC, and xETH across various DeFi platforms like Euler, Silo, and Morpho.
Elixir Network's deUSD stablecoin has significant exposure with $68 million lent against xUSD collateral.
TelosC is the largest exposed curator with $123.64 million in loans secured by Stream assets, followed by Elixir and MEV Capital.
MEV Capital's Arbitrum market faces high borrow rates and potential liquidation risks due to fundamental value oracle usage.

The identity of the fund manager and details of their investment strategy remain undisclosed by Stream Finance.