Coordinated Attack Hits Trump’s USD1 Stablecoin and WLFI Token — Here’s What Occurred

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TLDR

  • The USD1 stablecoin of World Liberty Financial briefly deviated from its $1 peg, dropping to $0.994 on Monday.
  • The company attributed the situation to a “coordinated attack” involving hacked accounts, paid influencers, and short sellers.
  • Thanks to its 1:1 mint-and-redeem mechanism, USD1 recovered to nearly $0.999.
  • WLFI’s native token dropped approximately 7% during the attack.
  • Binance holds around 87% of the circulating USD1, valued at about $4.7 billion.

World Liberty Financial (WLFI), the crypto project supported by President Donald Trump and his sons, stated that it was targeted by a coordinated attack on Monday, which briefly caused its USD1 stablecoin to lose its $1 peg.

USD1 reached a low of $0.994, approximately 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 suffered a decline. Its price dropped about 7% during the incident before partially recovering.

World Liberty Financial (WLFI) Price

The company posted on X that hackers compromised several co-founder accounts during the attack. Along with the hacks, short sellers took large positions against WLFI, wagering that its price would decline.

Paid influencers were also allegedly employed to spread fear, uncertainty, and doubt — known in crypto as FUD — to prompt retail holders to sell.

World Liberty stated that the aim was to “create chaos” around the project and profit from the ensuing price fluctuations.

How USD1 Maintained Its Peg

The company credited its mint-and-redeem mechanism for minimizing the damage. This system enables holders to directly exchange USD1 tokens for an equivalent amount of US dollars, which helps maintain the price stability.

“Thanks to USD1’s reliable 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 verifying those reserves.

The stablecoin currently has a market cap of around $5 billion, although it still lags behind USDT and Circle’s USDC in overall size.

Binance Connection Faces Scrutiny

The attack occurred 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 prohibited him from leading Binance.

currently holds approximately 87% of all the circulating USD1, valued at around $4.7 billion, according to Forbes.

Both Bloomberg and The Wall Street Journal have reported that Binance assisted in the creation of 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 that there were “no business relationships at all” 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.