XRP Users Warned to Withdraw After $93 Million DeFi Loss
Stream Finance, a DeFi protocol, has suspended deposits and withdrawals following a $93 million exploit linked to an external asset manager. The incident caused its stablecoin, Staked Stream USD (xUSD), to lose its peg, dropping to $0.30 before partially recovering. Connections to the XRP Ledger and the Midas platform, which holds xUSD in its mHYPER vault, have raised concerns in the XRP community about potential indirect risks. While Midas claims to remain operational, some users are withdrawing assets as a precaution. Stream has hired legal experts to investigate the full scope of the breach.
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Stream Finance Exploit Results in $93 Million Loss
Stream Finance, a decentralized finance (DeFi) protocol, has suspended all deposits and withdrawals after reportedly losing $93 million in an exploit involving one of its external asset managers. The company stated that it is assessing the full scope of the incident and has hired legal experts from Perkins Coie to investigate. However, pending deposits will not be processed until further notice.
Stablecoin xUSD Loses Peg
The issue originated when Stream's native stablecoin, Staked Stream USD (xUSD), lost its peg to the U.S. dollar. According to PeckShield, xUSD dropped as low as $0.30 on Tuesday before partially recovering to the $0.37 range. This instability raised alarm bells within the DeFi sector.
Impact on the XRP Community
This exploit caught the attention of the XRP community, largely because of Stream’s connection to Midas, a platform responsible for issuing the mXRP liquid yield token on the XRP Ledger. Midas previously held xUSD positions through its mHYPER vault, which operates under MiCA-regulated structures in Germany. While Midas stated it remains operational and unaffected, traders expressed concerns over indirect exposure via yield strategies tied to Stream’s assets.
Community Response: Better Safe Than Sorry
Despite Midas claiming that withdrawals are functioning normally, several XRP community members described an atmosphere of 'better safe than sorry' as users tested exit queues and liquidity buffers. A tweet from noted contributor Vet_X0 reinforced community anxiety, recommending users to withdraw as a precaution, particularly to avoid potential clawback risks in the event of redistribution of losses.
Midas Exposure and Ongoing Operations
Vet_X0 clarified that Midas's exposure was limited to xUSD positions held days earlier and that the platform continues to process redemptions normally. Additionally, as of press time, the mXRP official dashboard reports a total value locked (TVL) of approximately $25.55 million with an advertised 10% annual yield. Concerns remain, but operations appear stable for now.