Trump-backed World Liberty Financial says USD1 short and social media attack fails as stablecoin briefly dips

World Liberty Financial, one of the Trump family’s major crypto initiatives, sent an alert on Monday morning warning of a "coordinated attack" against its USD1 stablecoin. The dollar-pegged token briefly fell to about $0.99707 on Monday morning, The Block's data shows.

"Attackers hacked several WLFI cofounder accounts, paid influencers to spread FUD, and opened massive $WLFI shorts to profit from the manufactured chaos," the company posted on X. "It didn’t work. Thanks to USD1's sound mint-and-redeem mechanism and full 1:1 backing, we are trading steadily at par."

World Liberty co-founder Eric Trump deleted several WLFI posts on X prior to the coin's move lower, according to market observer Wu Blockchain.

The mechanism of the alleged attack is unclear at the time of writing. USD1 is backed by reserves held in custody by BitGo, including short-term U.S. Treasuries. World Liberty clarified later on Monday that the attack "involved unauthorized access to co-founders’ X (Twitter) accounts — not wallets or protocol infrastructure."

"Zero smart contracts were affected. All USD1 funds remain completely safe, secure, and fully backed. Our infrastructure and team operated exactly as designed," World Liberty said.

Tiny stablecoin price deviations happen nearly constantly due to trading spreads, liquidity, exchange differences, and arbitrage lags. A 0.01%-0.03% price fluctuation is generally not considered to be a depeg, unless sustained for a significant period of time, according to most experts. The token is currently trading closer to its $1 peg. 

“World Liberty’s elite engineering and security teams today successfully repelled a coordinated attack from multiple vectors," WLFI spokesman David Wachsman told The Block in an email. "Hackers and paid disinformation campaigns attempted to undermine trust in WLFI, but our battle-tested infrastructure and systems operated exactly as they should. Today’s attack is a further demonstration that USD1 was properly designed and can be relied upon under any conditions.”

WLFI, the project's free-floating token, dropped about 3%, according to The Block’s price page.

Earlier this year, WLTC Holdings LLC filed an application to establish a national trust bank to expand its USD1 operations. World Liberty is also involved in crypto lending.

The Trump-backed company drew controversy earlier this year over potential conflicts of interest after a United Arab Emirates-based entity used the USD1 stablecoin to facilitate a $2 billion investment in Binance. Additionally, an Abu Dhabi investment vehicle backed by UAE National Security Adviser Sheikh Tahnoon bin Zayed Al Nahyan purchased a 49% stake in World Liberty Financial for $500 million before President Donald Trump’s inauguration.

Binance, the world's largest cryptocurrency exchange formerly led by Changpeng Zhao, who President Trump pardoned, also elevated the status of USD1 as a trading pair on its platform.

Editor's note (Feb. 23 — 20:35 UTC): Adds statement from WLFI spokesman David Wachsman and later clarification by World Liberty.