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- Stream Finance lost $93 million in November, sending ripples across the DeFi ecosystem.
- Now, the project’s founders are suing an external manager over the missing money.
- The DeFi protocol lasted roughly nine months before its collapse.
In early November, the Ethereum-based yield protocol Stream Finance said an “external fund manager” had lost $93 million in crypto, or about 17% of the assets it had been entrusted.
While the incident rocked users of Stream and affiliated DeFi protocols, the people behind the company were tight-lipped as to what happened.
Until now.
In a lawsuit filed Monday in federal court in San Francisco, Stream’s co-founders — suing as Stream Trading Corp. — accused Georgia resident Ryan DeMattia of using the $93 million to cover his losses after he defaulted on a personal loan.
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The lawsuit also alleged that Florida resident Caleb McMeans had failed to honour an agreement he signed when he took control of the protocol and the Stream brand in January.
Stream Trading Corp. is now asking a federal court to enforce that agreement as McMeans allegedly attempts to deflect responsibility for the incident.
McMeans and DeMattia could not immediately be reached for comment on Wednesday.
‘Delays and excuses’
The lawsuit details the brief, yet winding history of the Stream protocol, which lasted only nine months before its co-founders decided to shut it down in November 2024, citing slowing growth and “operational challenges.”
The co-founders go unnamed in the lawsuit. But Argentinian crypto investor Diogenes Casares has said on social media and in interviews that he built the protocol, as well as Klyra, a platform that allows users to trade across multiple crypto exchanges simultaneously.
Casares did not immediately respond to comment.
Just two months after disabling deposits into Stream, the co-founders met McMeans, a trader “known for managing complex yield farming strategies,” the lawsuit states. McMeans offered to buy the Stream protocol and brand.
According to an agreement signed in January, McMeans would have complete control of Stream, including trading strategies, reporting yield to the protocol’s users, and manually honouring their withdrawal requests, the lawsuit states.
Stream Trading Corp. would act as a service provider, creating new smart contracts, a new website, and a new token, according to the lawsuit.
In exchange, McMeans would route 35% of collected fees to Stream Trading Corp., maintain full liability in the event of a theft, and maintain “total transparency of where stream positions are deployed.”
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But after McMeans entered several off-chain arrangements, it became increasingly difficult to monitor Stream’s trading strategy in real time, according to the lawsuit.
When Stream’s co-founders pushed for greater transparency in September, McMeans “consistently responded with delays and excuses,” according to the lawsuit.
He eventually admitted he had allowed an “employee,” DeMattia, to invest more than $90 million off-chain.
An ‘outlandish story’
DeMattia, in turn, also dodged the co-founders’ inquiries, according to the lawsuit.
“DeMattia offered a series of patently false excuses for why he could not provide any further information, even claiming at one point that his laptop had been destroyed in a car crash,” the lawsuit reads.
“This outlandish story was demonstrably false; yet, at the same time, Mr. McMeans urged Stream Trading Corp. to stop asking questions and to believe Mr. DeMattia.”
McMeans eventually relented, according to the lawsuit. He acknowledged he had no formal relationship with DeMattia and agreed to withdraw crypto he had entrusted to his “employee.”
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That’s when DeMattia came clean, according to the lawsuit. On November 2, he admitted he had lost “nearly all” of the Stream protocol assets under his control, which were worth about $93 million at the time.
“The precise facts underlying this loss remain unclear,” the lawsuit reads.
“But upon information and belief, on October 10, 2025, Mr. DeMattia faced a margin call on a personal loan for which he lacked sufficient funds to cover, had his position liquidated, and then used Stream Protocol assets to which he had access to cover his loss.”
On November 4, the Stream X account said in a post that it would open an investigation after an “external fund manager” had “disclosed the loss of approximately $93 million in Stream fund assets.”
Ripple effect
The loss was widely felt across the DeFi ecosystem.
All told, Stream had borrowed $283 million to mint its xUSD synthetic dollar, according to an estimate from Trevee, a yield protocol that lost $14 million in the incident.
Trevee wasn’t the only protocol affected. In addition to some relatively obscure protocols, DeFi stalwarts Compound, Euler, and Morpho had various levels of exposure to Stream, according to crypto risk manager Chaos Labs.
McMeans began telling people publicly and privately that he was suicidal, according to the lawsuit.
Moreover, he moved $2.1 million in Stream assets to a personal wallet before routing them through Railgun, a privacy protocol that can be used to cloak the flow of crypto across the Ethereum blockchain.
(McMeans later returned the crypto, according to the lawsuit.)
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The co-founders convinced McMeans to transfer assets to a multi-signature wallet so the crypto would not be lost in the event he “became incapacitated,” according to the lawsuit.
But McMeans has since used the joint control of the remaining assets to disclaim responsibility for the incident, according to the lawsuit.
“Presently, Mr. McMeans refuses to take any action to clean up his own mess unless Stream Trading Corp. releases him from all liability for his actions,” the lawsuit reads.
Stream Trading Corp. has accused McMeans of breaching his contract and asked a federal court to award damages of at least $75,000.
The company has also asked the court to find that its agreement with McMeans was “valid, binding and enforceable,” among other things.
Aleks Gilbert is DL News’ New York-based DeFi correspondent. You can reach him ataleks@dlnews.com.
Source: www.dlnews.com