World Liberty Financial says coordinated attack briefly depegged USD1; peg restored via mint-redeem
World Liberty Financial (WLFI), the crypto firm backed by Donald Trump and his family, reported a coordinated multi-pronged attack that briefly pushed its USD1 stablecoin off the $1 peg and knocked the WLFI governance token down about 7–8%. The company said hackers compromised several co-founder X (Twitter) accounts, short sellers opened large positions against the WLFI token and paid influencers to spread FUD. On Binance USD1 briefly fell to about $0.98 on one feed (CoinGecko showed a smaller dip to ~$0.994) before parity was restored within roughly 30 minutes. WLFI credited USD1’s mint-and-redeem mechanism and 1:1 backing for the rapid stabilisation and pointed to its collateral structure as resilient. The incident followed a WLFI forum at Mar-a-Lago and comes amid scrutiny over ties to Binance — Forbes reported Binance holds a large share (~87%) of USD1 supply. Traders should note the short duration of the depeg, exchange price disparities, the role of social media-driven FUD and short sellers as catalysts, and the elevated reputational and regulatory risk for projects tied to high-profile figures.
Neutral
The immediate price impact on USD1 was short-lived and parity was restored quickly, indicating limited lasting downside for the stablecoin itself. WLFI credited the mint-and-redeem mechanism and full backing for the stabilization, and price feeds showed only brief, exchange-specific deviations. Those factors reduce long-term negative pressure on USD1, so the event is not clearly bearish for the stablecoin. However, the episode exposed vulnerabilities — reliance on concentrated exchange custody (large share on Binance), social-media-driven FUD, hacked executive accounts and active shorting — which raise counterparty, operational and reputational risks that could increase volatility and episodic depegs in the future. For traders: expect short-term spikes in spread and liquidation risks on WLFI token trades, possible temporary flows out of USD1 during stressed windows, and heightened scrutiny that could affect liquidity. Overall, price action for USD1 itself looks neutral (rapid recovery), while the WLFI governance token may face increased volatility and downside risk until transparency on custody and resilience is improved.