TLDR
- World Liberty Financial’s USD1 stablecoin briefly lost its $1 peg, dropping to $0.994 on Monday
- The company blamed a “coordinated attack” involving hacked accounts, paid influencers, and short sellers
- USD1 recovered to near $0.999 thanks to its 1:1 mint-and-redeem mechanism
- WLFI’s native token dropped about 7% during the attack
- Binance holds roughly 87% of USD1 in circulation, worth ~$4.7 billion
World Liberty Financial (WLFI), the crypto project backed by President Donald Trump and his sons, said it was targeted by a coordinated attack on Monday that briefly pushed its USD1 stablecoin off its $1 peg.
A coordinated attack was launched against USD1 this morning. Attackers hacked several WLFI cofounder accounts, paid influencers to spread FUD, and opened massive $WLFI shorts to profit from the manufactured chaos.
It didn’t work.
Thanks to USD1’s sound mint-and-redeem mechanism…
— WLFI (@worldlibertyfi) February 23, 2026
USD1 fell to $0.994 at its lowest point, about 0.6% below its intended dollar anchor, according to CoinGecko data. The token later recovered to around $0.998 to $0.999.
WLFI’s native token, WLFI, also took a hit. Its price dropped about 7% during the incident before partially recovering.
The company posted on X that hackers compromised several co-founder accounts during the attack. Alongside the hacks, short sellers opened large positions against WLFI, betting its price would fall.
Paid influencers were also allegedly used to spread fear, uncertainty, and doubt — known in crypto as FUD — to push retail holders into selling.
World Liberty said the goal was to “manufacture chaos” around the project and profit from the resulting price swings.
How USD1 Held Its Peg
The company credited its mint-and-redeem mechanism for limiting the damage. This system lets holders exchange USD1 tokens directly for an equal amount of US dollars, which helps keep the price anchored.
“Thanks to USD1’s sound mint-and-redeem mechanism and full 1:1 backing, we are trading steadily at par,” World Liberty said in its post.
USD1 is backed 1:1 by short-term US government treasuries, dollar deposits, and cash equivalents. Crypto custodian BitGo manages the reserves, and consulting firm Crowe signs monthly attestation reports confirming those reserves.
The stablecoin currently has a market cap of about $5 billion, though it still trails Tether’s USDT and Circle’s USDC in overall size.
Binance Connection Draws Scrutiny
The attack came just days after WLFI hosted a crypto forum at Trump’s Mar-a-Lago resort in Florida. Speakers included government officials, banking executives, and former Binance CEO Changpeng Zhao.
Trump pardoned Zhao in October 2025. Zhao had previously served four months in prison following a 2023 deal with US authorities that also barred him from leading Binance.
Binance currently holds about 87% of all USD1 in circulation, worth around $4.7 billion, according to Forbes.
Both Bloomberg and The Wall Street Journal have reported that Binance helped create USD1. The stablecoin was used to settle a $2 billion investment by UAE-based firm MGX into Binance in March 2025.
Some US lawmakers are now questioning whether Trump’s pardon of Zhao and WLFI’s ties to Binance represent a conflict of interest.
Zhao said in January there were “no business relationships whatsoever” between himself and the Trump family, and that he did not plan to return to lead Binance.
At the time of writing, USD1 was trading at approximately $0.998 to $0.999, still slightly below its $1 target.
