TLDR
- USD1 briefly moved off its dollar peg after WLFI reported a coordinated attack on the protocol.
- The token fell to $0.994 before recovering to $0.998 later in the day.
- WLFI stated that attackers hacked cofounder accounts and spread false claims through paid influencers.
- The team said traders opened large short positions against the WLFI token to increase pressure.
- WLFI reported that the redemption system kept the stablecoin from dropping further.
The stablecoin USD1 moved off its dollar price on Monday as project leaders reported an attack, and the token later steadied. The shift drew attention because the protocol maintains ties to President Donald Trump’s family, and trading data showed increased activity. The team issued direct statements that addressed the events and described the response.
USD1 Trades Below Peg During Reported Attack
USD1 traded as low as $0.994 during the day, and the move reflected pressure on the peg. The token later traded at $0.998, and the price continued to track closer to its target.
The developers said attackers gained access to several cofounder accounts and used those accounts to spread false claims. They also said paid voices attempted to create fear and push negative messages across social platforms.
The group stated that traders opened short positions against the protocol’s main token during the episode. They said the activity sought to trigger panic and weaken market trust.
The project responded quickly, and the team posted that “It didn’t work” after systems continued operating. They said the team acted fast to verify internal access and restore account control.
WLFI Protocol Says Attack Targeted Confidence
The protocol said the attack used many tactics, and the team argued the goal was fast disruption. They described the effort as a planned push to profit from volatility.
WLFI leaders said the short positions focused on the protocol’s native token and attempted to pressure market makers. They added that technical safeguards limited trading stress on both USD1 and WLFI.
The team said the statements posted online were false and aimed at creating doubt that could influence normal trading. They restored control of compromised accounts and said internal checks continued.
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
The protocol said the attackers misjudged the market response because holders relied on available redemption systems. They added that the market stabilized because users verified reserves and processed redemptions.
USD1 Maintains Backing Through Redemption Mechanism
USD1 is issued with BitGo, and the product holds short-term U.S. treasuries and cash. The issuer reports monthly reviews, and Crowe signs those reports.
The team highlighted the redemption system that allows holders to exchange USD1 for dollars. They said this system offered support during the intraday price move.
The token has a $5 billion market cap, and it continues to trail larger assets such as USDT and USDC. The project said trading returned to normal levels later in the day.
Data from CoinGecko showed USD1 trading close to $1 into the evening. The team said they continued reviewing the earlier unauthorized access.
