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Trump-associated stablecoin experiences instability as WLFI reports it is facing a ‘coordinated attack.’
The USD1 token briefly decreased to $0.994, approximately 0.6% below its $1 target, according to data from CoinGecko.
World Liberty Financial leadership team (Jesse Hamilton/CoinDesk)
Key points:
- USD1 dropped to a low of $0.994 (0.6% below peg) before bouncing back to approximately $0.998.
- The team alleges that hackers breached cofounder accounts, compensated influencers to create fear, and initiated short positions on WLFI to incite panic and take advantage of the ensuing volatility.
- Developers attribute the dollar-for-token redemption capability of USD1 as a vital element in maintaining trust and averting a more severe or extended depeg, highlighting the significance of direct convertibility for stablecoin stability.
USD1, the U.S. dollar stablecoin from World Liberty Financial — a cryptocurrency protocol with strong ties to President Donald Trump’s family — experienced a decline from its $1 peg on Monday, which the developers characterized as a "coordinated attack" on the protocol.
The token reached a low of $0.994 throughout the day, around 0.6% away from its intended $1 target, as per CoinGecko data.
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In a post on X on Monday, the USD1 team reported that several cofounder accounts were compromised, influencers were incentivized to create uncertainty, and short positions against the native token WLFI were established in what they described as a strategic attempt to induce panic and profit from it.
"It didn’t work," the post indicated, asserting that a redemption system enabling USD1 holders to exchange their tokens for an equivalent amount of U.S. dollars is the reason the peg remained intact.
Nonetheless, the token continued to trade at $0.998, roughly 0.2% below its designated $1 price anchor, according to CoinGecko, which compiles pricing information from various exchange pairs.
USD1 price (CoinGecko)
USD1, created in collaboration with crypto custodian BitGo (BITG) is one of the largest dollar-pegged stablecoins. It boasts a market capitalization of $5 billion, yet it still lags behind key competitors such as Tether’s USDT and Circle’s (USDC).
