Stream Finance Loses $93 Million as Stablecoin XUSD Collapses

Stream Finance has been thrown into crisis after revealing that an external fund manager lost around $93 million of the platform’s assets. The news sent shockwaves through its ecosystem, triggering a rapid sell‑off and causing its stablecoin, XUSD, to plunge by nearly 77 percent. The collapse has left users stranded with frozen accounts and a trail of unanswered questions about how such a massive loss occurred.

The Domino Effect Behind the Collapse

According to Stream Finance, the missing funds originated from assets managed externally across various yield farming and investment strategies. Once the loss came to light, the protocol immediately froze deposits and withdrawals to prevent further damage.

❤️💛💚💙

⚠️ Stream Finance has disclosed a $93 MILLION Dollar Loss.

Stream Finance was interviewed on Taiki Maeda channel.

A Young man was in charge (shown in the interview), and he had run up an account from very small.

🔵 He had great trading skill ability and crypto market… pic.twitter.com/DNzOAo9PvZ

— yourfriendSOMMI ❤️💛💚💙 (@yourfriendSOMMI) November 4, 2025

The fallout hit hard. XUSD, a token designed to maintain a $1 peg, nosedived to roughly $0.30. The platform’s total value locked also crumbled from about $204 million at the end of October to just $98 million. In the world of decentralized finance, such a drawdown is enough to destroy trust overnight.

How It All Fell Apart

Stream’s model was built on users depositing collateral, cash, or crypto, which was then allocated into different strategies, such as market-making and lending. When the fund manager mismanaged or lost assets, the collateral backing weakened dramatically.

Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets.

In response, Stream is in the process of engaging Keith Miller and Joseph Cutler of the law firm Perkins Coie LLP, to lead a comprehensive…

— Stream Finance (@StreamDefi) November 4, 2025

Without proper support, XUSD’s peg unraveled, and panic spread fast across the community. The complex network of leveraged positions accelerated the loss, illustrating the fragility of layered DeFi systems when transparency is lacking.

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The Fallout Across DeFi

This crisis has once again exposed the vulnerability of yield‑driven DeFi protocols. Investors are realizing how quickly things can spiral out of control when protocols rely heavily on third‑party fund managers and aggressive strategies. What started as a single failure has now become a cautionary tale across the industry.

As withdrawals remain suspended and confidence dwindles, other DeFi projects are bracing for tougher scrutiny around risk management and reserve transparency.

Legal Moves and Damage Control

Stream Finance has hired law firm Perkins Coie LLP to lead an independent investigation into what happened. The platform has pledged to recover all assets possible and to investigate how the $93 million loss occurred.

It also announced plans to withdraw any remaining liquid funds while halting all normal operations until the investigation concludes. Users are now waiting for updates on whether any portion of the missing funds might be recovered or if the external manager responsible will be named.

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The Bigger Lesson for Crypto Investors

The Stream Finance meltdown shows how quickly stability can evaporate in decentralized systems that lack oversight. High returns often come with unseen risks, and the crash of XUSD from $1 to 30 cents is a vivid reminder of that. Even without a hack or exploit, poor fund management can devastate an entire protocol. As the investigation continues, the $93 million loss and 77 percent drop in XUSD’s value will serve as another lesson in the growing pains of DeFi’s evolution.

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