WLFI/USD1 Targeted Attack Briefly Depegs Stablecoin, WLFI Token Drops
World Liberty Financial (WLFI) reported a coordinated attack targeting its dollar‑pegged stablecoin USD1 and the WLFI token. Attackers breached founder/cofounder X accounts, paid influencers to spread FUD and opened large short positions in WLFI. The USD1 peg briefly fell to $0.994 (≈0.6% below peg) before recovering to about $0.999; WLFI token dropped ~7% intraday to $0.1128 and trades near $0.11 (24h: -1.5%). WLFI says reserves were not lost — USD1 remains 1:1 backed by short‑term U.S. Treasuries, dollar deposits and cash equivalents custodied by BitGo with monthly attestations by Crowe — and credited its mint‑and‑redeem mechanism for restoring stability. The incident follows other WLFI incidents (an EIP‑7702 exploit and prior account compromises) and occurred days after a WLFI forum at Mar‑a‑Lago attended by former Binance CEO Changpeng Zhao; reports note Binance holds ~87% of circulating USD1. U.S. lawmakers are probing ties between WLFI and Binance after Zhao’s pardon. Technicals for WLFI show a downtrend (RSI ~42, Supertrend bearish, EMA20 ≈ $0.1173) with supports at $0.1068 and $0.0961 and resistances at $0.1173 and $0.1434. Key takeaways for traders: monitor USD1 peg stability, exchange concentration risk (Binance), short interest and on‑chain reserve attestations; expect possible short‑term volatility, squeezes or further targeted manipulation attempts. This is not financial advice.
Bearish
The coordinated attack produced an immediate negative price impact: USD1 briefly depegged (to $0.994) and WLFI’s native token fell roughly 7% intraday. Though WLFI reports no reserve loss and the peg recovered, the incident raises clear short‑term risks: elevated volatility, concentrated exchange custody (~87% on Binance) and active short positions increase the likelihood of further price pressure or sudden squeezes. Technical indicators (RSI ~42, EMA20 bearish, Supertrend bearish) support a continued near‑term downtrend for WLFI until on‑chain attestations and reduced exchange concentration restore confidence. Longer term, if attestations remain clean and mint‑redeem mechanics continue to function, confidence could recover; however repeated targeted attacks and regulatory scrutiny (U.S. lawmakers probing WLFI‑Binance ties) increase structural risk and keep sentiment fragile.