Stream Finance Halts Operations After $93 Million Losses as Stablecoin Crashes to $0.50

By Emir Abyazov

The decentralized finance (DeFi) platform Stream Finance has suspended operations after reporting losses of $93 million.

An external fund manager disclosed the shortfall, which caused the project’s stablecoin, Staked Stream USD (XUSD), to lose its peg to the U.S. dollar, plunging to $0.50.

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

The project has retained lawyers from Perkins Coie to investigate the incident.

Withdrawals suspended and value plunges

While Stream Finance investigates the cause of the losses, it has temporarily halted withdrawals and is not processing any pending deposits.

The platform’s native stablecoin, XUSD, has lost nearly half its value, according to TradingView data.

Source: TradingView

Stream Finance, known for its yield-generation model through “recursive looping,” also issued a collateral-backed stablecoin designed to maintain stability and liquidity across its ecosystem.

However, signs of trouble emerged before the official announcement. Many users on X (formerly Twitter) noticed that deposits and withdrawals were suspended without any communication from the team.

Source: X

Labs founder Omer Goldberg posted about 17 hours before Stream’s statement, warning that XUSD was already losing its peg, falling “below its target range.”

At the time of writing, XUSD continues to trade near $0.51.

Transparency questions surface

Just days before the incident, Stream Finance had addressed community concerns about discrepancies in its total value locked (TVL) compared to figures from DefiLlama.

“DefiLlama has decided that recursive looping is not TVL per their own definitions. We disagree with this, but to be transparent to users the website now makes a distinction between user deposits (~$160M) and total assets deployed across strategies. (~%$520M),” the project stated.

Experts say the event underscores the risks behind complex DeFi mechanisms.

“This underscores the critical importance of understanding exactly how protocols generate yield and the significant risks involved in complex DeFi strategies, especially those that disagree with standard metrics like DefiLlama’s TVL,” said Minal Thurkal, Head of DeFi Ecosystem Development at CoinDCX.

Source:: Stream Finance Halts Operations After $93 Million Losses as Stablecoin Crashes to $0.50