Key Takeaways
- USD1 stablecoin from World Liberty Financial temporarily slipped to $0.994, losing its dollar peg on Monday
- World Liberty Financial attributes the incident to a “coordinated attack” with compromised accounts, influencer campaigns, and short positions
- The stablecoin’s mint-and-redeem system helped restore USD1 to approximately $0.999
- The native WLFI token saw a roughly 7% decline during the same timeframe
- Approximately 87% of circulating USD1, valued at ~$4.7 billion, is held on Binance
World Liberty Financial (WLFI), the cryptocurrency venture associated with President Donald Trump and his family, reported facing an orchestrated assault on Monday that temporarily destabilized its USD1 stablecoin from its intended dollar parity.
The USD1 stablecoin reached a low of $0.994, representing approximately a 0.6% deviation from its target value, based on information from CoinGecko. The digital asset subsequently rebounded to trade between $0.998 and $0.999.
Simultaneously, the project’s native WLFI token experienced downward pressure. The token’s value declined roughly 7% throughout the episode before staging a partial recovery.
According to a statement shared on X, the organization reported that malicious actors gained unauthorized access to multiple co-founder accounts. Concurrent with these security breaches, traders established substantial short positions against WLFI, speculating on further price deterioration.
The company additionally claimed that compensated social media personalities were deployed to disseminate negative sentiment — commonly referred to as FUD (fear, uncertainty, and doubt) in cryptocurrency communities — with the intention of triggering panic selling among individual investors.
According to World Liberty’s statement, the objective was to “manufacture chaos” surrounding the platform and generate profits from the ensuing market volatility.
USD1’s Stabilization Mechanism
World Liberty Financial attributed the stablecoin’s resilience to its fundamental mint-and-redeem architecture. This framework enables token holders to convert USD1 directly into equivalent US dollar amounts, providing a natural price stabilization mechanism.
“Thanks to USD1’s sound mint-and-redeem mechanism and full 1:1 backing, we are trading steadily at par,” the company stated in its announcement.
The USD1 token maintains complete backing through a combination of short-duration US Treasury securities, dollar-denominated deposits, and cash-equivalent assets. Cryptocurrency custody provider BitGo oversees the reserve holdings, while accounting firm Crowe provides monthly attestation documentation verifying the reserve adequacy.
With a current market capitalization hovering around $5 billion, USD1 remains considerably smaller than established stablecoins like Tether’s USDT and Circle’s USDC.
Binance Relationship Under Investigation
The alleged attack occurred shortly after World Liberty Financial organized a cryptocurrency conference at President Trump’s Mar-a-Lago property in Florida. The event featured presentations from government representatives, financial institution executives, and former Binance chief executive Changpeng Zhao.
President Trump granted Zhao a pardon in October 2025. Zhao had completed a four-month incarceration period following a 2023 settlement with US prosecutors that additionally prohibited him from serving in Binance leadership positions.
Binance reportedly controls approximately 87% of the total USD1 supply in circulation, representing roughly $4.7 billion in value, according to Forbes reporting.
Publications including Bloomberg and The Wall Street Journal have documented Binance’s involvement in USD1’s development. The stablecoin reportedly facilitated a $2 billion investment from United Arab Emirates-based MGX into Binance during March 2025.
Certain members of Congress are now examining whether the presidential pardon granted to Zhao and World Liberty Financial’s connections to Binance constitute potential conflicts of interest.
In January, Zhao stated there were “no business relationships whatsoever” between himself and the Trump family, adding that he had no intentions of resuming leadership at Binance.
As of this writing, USD1 continues trading near $0.998 to $0.999, maintaining a slight discount to its intended $1 valuation.
