Stream Finance Faces Legal Action Over Misappropriation of Funds

According to PANews, Stream Finance, an Ethereum-based yield protocol, reported a loss of $93 million in cryptocurrency due to an 'external fund manager' in early November, accounting for approximately 17% of the assets under management. On Monday, Stream's co-founder filed a lawsuit under the name Stream Trading Corp., accusing Georgia resident Ryan DeMattia of defaulting on a personal loan and misappropriating the funds to cover his personal losses. The lawsuit also accuses Florida resident Caleb McMeans of failing to fulfill the agreement signed in January when he took over the protocol and brand, requesting the court to enforce the agreement due to McMeans allegedly shirking responsibility. The lawsuit outlines the brief and tumultuous history of the Stream protocol, which operated for only nine months before closing in November 2024 due to slowed growth and 'operational challenges.' McMeans proposed an acquisition, agreeing to take full control as per the agreement, with Stream serving as a service provider. McMeans was responsible for allocating fees, assuming liabilities, and disclosing fund flows. However, after several off-chain agreements, real-time access to Stream's trading strategy became increasingly difficult. In September, the co-founder demanded increased transparency, but McMeans delayed. He later admitted to allowing 'employee' DeMattia to invest over $90 million off-chain and assisting DeMattia in evading inquiries from the co-founder. McMeans eventually conceded, acknowledging no formal relationship with DeMattia and agreeing to retrieve the cryptocurrency entrusted to this 'employee.'