According to Stream’s disclosure, the move came as the team sought time to investigate the damage and to stabilize core functions.
The protocol’s stable token, xUSD, lost its close tie to $1 and traded near $0.51 at one point, a sharp loss of confidence that pushed some users to pull funds off the platform.
On-chain trackers show total value locked fell from about $204 million at the end of October to near $98 million after the news spread.
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…
The firm’s involvement suggests that legal and forensic work will run alongside technical analysis. The exact cause of the loss has not been confirmed.
Reports list a range of possibilities — from failed trading positions managed off-chain to a bad investment decision by a third party — but no definitive root cause has been released.
Liquidations or forced sales are a risk when a stable token loses its peg, and other platforms that accepted xUSD might now face sudden shortfalls.
Based on current on-chain signals, liquidations and re-pricing events are already visible in related markets.
It is too early to measure the full scope, however, and authorities or counterparties have not announced formal actions.
The investigation’s findings and any forthcoming audit from Stream or its legal team are expected to shed light on how the loss occurred.
Market observers are also keeping an eye on xUSD’s price, shifts in total value locked, and any response from protocols that use Stream’s assets as collateral.
Updates from Stream’s official channels and documents from Perkins Coie will likely provide the clearest picture of the next phase in the case.
For now, the freeze on deposits and withdrawals remains in effect as the inquiry continues.
Featured image from Unsplash, chart from TradingView
