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News / Crypto / XUSD Stablecoin Collapses 70% After $93M Stream Finance Meltdown

XUSD Stablecoin Collapses 70% After $93M Stream Finance Meltdown

04.11.2025 / By Noirbull

TL;DR

XUSD, the staked stablecoin from Stream Finance, crashed by over 70% after a $93 million loss involving an external fund manager. Stream has halted withdrawals, hired Perkins Coie for investigation, and is recovering remaining funds. The event marks another major blow to DeFi stability in 2025.

Stream Finance’s staked stablecoin, XUSD, suffered a devastating crash early Tuesday, losing over 70% of its value in a matter of hours. The token fell to as low as $0.30, according to CoinGecko, after the project disclosed a massive $93 million loss tied to one of its external fund managers.

The collapse sparked panic across decentralized finance (DeFi) markets, marking one of the most severe depegging events of 2025. XUSD’s sharp decline highlights the lingering fragility within DeFi protocols that rely heavily on third-party fund management.

Stream Finance Issues Emergency Statement on X.com

In a post on X.com, the Stream Finance team confirmed the incident and announced that all deposits and withdrawals had been suspended until further notice.

“Yesterday, an external fund manager overseeing Stream funds disclosed the loss of approximately $93 million in Stream fund assets,” the team wrote, adding that top legal counsel from Perkins Coie LLP—Keith Miller and Joseph Cutler—had been hired to lead an independent investigation.

As a safeguard, the company also began withdrawing remaining liquid assets to prevent further losses, emphasizing that it remains committed to “full transparency and responsible governance.”

Blockchain security firm PeckShield was among the first to raise the alarm, tracking the initial 23% dip in XUSD before the collapse deepened to more than 60% within an hour. As of publication, the token was trading around $0.48, down 62% in a single day, with a market cap of roughly $95.6 million and 24-hour trading volume near $1.6 million.

Confidence in DeFi Faces Renewed Pressure

The XUSD crisis adds to an already difficult year for DeFi platforms. Just weeks ago, Balancer V2 suffered a $128 million exploit, impacting several of its forks. StakeWise DAO, one of the affected projects, later confirmed it recovered about $20 million with support from Balancer and Gnosis Chain security experts.

Despite these partial recoveries, DeFi remains under scrutiny for recurring vulnerabilities. PeckShield’s latest report revealed that in September alone, hackers drained over $127 million from 20 major protocols—bringing the total for 2025 above $3 billion.

For investors, these frequent breakdowns underscore a persistent truth: even as DeFi matures, trust and stability remain elusive goals.

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Disclaimer: The information and publications do not serve as, and should not be construed as, financial, investment, trading, or any other form of advice or recommendations endorsed or provided by Noirbull. Any expression of opinion (which may change without prior notice) reflects the author's personal viewpoint, and the author does not assert any representations or warranties regarding the accuracy or comprehensiveness of the information or analysis provided. Neither the authors nor Noirbull bear responsibility for any losses arising from investments made based on perceived recommendations, forecasts, or other information presented herein. The content of these publications should not be construed as a direct or implied assurance, guarantee, or indication by Noirbull that customers will profit or that losses associated with them can or will be mitigated if they rely solely on the information provided.

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