Stream Finance, the decentralized finance yield optimization platform that collapsed last month, is suing its current owner and operator, Caleb McMeans, known online as 0xlaw, according to court filings.
Stream Trading Corp., which first launched Stream Finance in 2024, has filed a lawsuit against McMeans, who the firm identified as the person behind the username 0xlaw, and says bought the platform in early 2025 but mismanaged it, leading to its collapse. The lawsuit, filed on Dec. 8 in the U.S. District Court for the Northern District of California, accuses McMeans of running Stream Finance “as his own business” and mismanaging user funds.
It also alleges that McMeans failed to deal with the fallout after “a yield farming trader” he hired, Ryan DeMattia, lost roughly $93 million “in a variety of off-chain strategies,” which represents about 17.5% of the assets under his management, according to the filing. Once reported in early November, the loss triggered the platform’s collapse, and led to wider contagion across the DeFi sector.
As the lawsuit alleges, 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.”
At the time of the collapse, Stream Finance announced on its official X account that it was engaging the U.S. law firm Perkins Coie, which filed the complaint this week, but Stream didn’t disclose the target of the lawsuit at the time. The Defiant reached out to the law firm for comments, but hasn’t heard back by press time.
How McMeans Took Control
According to the filing, Stream Trading Corp. originally ran a small yield-farming project called “Stream Protocol,” where users deposited tokens into automated programs that tried to earn returns by moving funds across protocols.
But the company wound that product down in late 2024 due to “operational challenges,” the filing reads. McMeans approached the founders with plans to revive the Stream Protocol brand and run his own strategies under it. The two sides agreed to transfer the project to him in January 2025, according to the complaint. Since then, the project was mainly advertised as Stream Finance.
It’s not clear whether Stream was solvent at the time of the transfer. Commenting on the filing, Thomas Braziel, founder and CEO of 117 Partners, an investment firm specializing in distressed crypto claims, noted in an X thread on Dec. 9 that the complaint “very conspicuously avoids stating whether depositor liabilities existed at transfer.” He added:
“If the Protocol had even $1 of net obligation, the founders could be on the hook despite the agreement. This is why insolvency at transfer is the atomic bomb in this case.”
Once the transfer was completed, McMeans was fully in charge, per the filing. The lawsuit says he controlled “all on-chain trading” and “all off-chain business agreements” as well as “assumed the rights and obligations associated with managing the depositor assets that had remained after the November 2024 winddown.”
He also allegedly hired traders, including DeMattia, whose loss in early November caused Stream’s synthetic dollar token xUSD to crash.
As The Defiant reported, that plunge rippled into several lending markets that had accepted xUSD as collateral, turning a single error into ecosystem-wide damage. Even though 0xlaw initially agreed to talk to The Defiant via Discord on Oct. 28, they went silent soon after reports of the fallout began, and their accounts have been deleted across social media platforms.
Millions Routed Through Railgun
The lawsuit also notes that on Nov. 2, just two days before Stream publicly unveiled the $93 million loss, McMeans “himself transferred roughly $2.1 million from Stream Protocol wallets to his personal wallets,” and then routed the funds through Railgun, a DeFi mixing protocol.
“Mr. McMeans was also actively moving assets to Railgun during a time that Mr. DeMattia had already siphoned off $93 million for his own uses and while Mr. McMeans was openly stating his intention to commit suicide,” the lawsuit reads.
It also adds that McMeans had deleted “all of his private Discord communications with DeMattia since Oct. 10, the same date on which, upon information and belief, DeMattia experienced liquidation of a significant personal position he held.” The Oct. 10 crash led to record liquidations across crypto, as high-leverage traders were forced out of positions as prices dropped.
When Stream Trading Corp. confronted McMeans about the losses, he told them he was suicidal, which 0xlaw also publicly stated on their X account in now deleted posts, in what the complaint describes as part of a broader pattern of “concerning conduct.”
The team says it suggested moving some of the project’s assets into a multi-signature wallet “to mitigate the risk of further significant losses.” The filing says McMeans is now using that step to argue that Stream Trading Corp. is responsible for the problems he caused while running the project.
What’s Next
Stream Trading Corp. says McMeans has refused to engage with affected users, counterparties, or protocols tied up in the fallout of Stream’s collapse. Instead, he “has asserted a number of arguments — many of which are contradictory — in an effort to avoid responsibility,” the complaint states.
It also says that McMeans is now refusing to take any steps to “clean up his own mess unless Stream Trading Corp. releases him from all liability for his actions.”
The lawsuit asks the court to enforce the 2025 agreement that transferred the project to McMeans and to require him to repay damages tied to what the filing repeatedly describes as his mismanagement.
Soon after the debacle, 0xlaw posted on X that they were also planning to take legal action, but against the trader who lost the funds. 0xlaq wrote at the time:
“zero strategies i was running suffered any drawdowns. we are pursuing aggressive legal against the asset manager responsible. i had zero knowledge of this due to various reasons until briefly before it was made public.”
