DeFi platform Stream Finance has encountered a financial issue, leading the company to initiate an investigation led by Perkins Coie LLP.
The firm, recognized for enhancing capital efficiency and yield generation through innovative decentralized finance protocols, announced that an external fund manager overseeing Stream funds revealed a loss of approximately $93 million in the firm’s assets. This has resulted in the suspension of deposits and withdrawals as the investigation proceeds.
In light of the unexpected loss, Stream has engaged Perkins Coie LLP, a prominent international law firm known for its expertise in corporate governance, financial investigations, and regulatory enforcement.
The fintech litigation firm has appointed attorneys Keith Miller and Joseph Cutler, experienced in handling internal investigations and cryptocurrency-related cases, to conduct a comprehensive inquiry into the situation.
“Our decision to retain Perkins Coie LLP reflects Stream’s commitment to transparency and strong corporate governance,” Stream stated.
Stream is currently in the process of withdrawing all liquid assets, with completion expected soon.
The company has temporarily halted all withdrawals and deposits, with pending transactions put on hold until further notice. It has committed to providing periodic updates as more information emerges and the investigation develops.
Fallout
The substantial loss at Stream Finance has caused uncertainty about how it will be addressed among the holders of the protocol’s xUSD, xBTC, and xETH tokens, as well as those who have lent money against these tokens.
xUSD is widely used as collateral in various curated lending markets across platforms, operating on multiple blockchain networks.
According to an analyst, the total outstanding loans and borrowings secured by Stream-related collateral likely exceed $280 million. This figure does not account for indirect exposures, which may not be completely accurate.
Stream Finance was contacted for a statement.
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