The dollar-backed stablecoin USD1, issued by World Liberty Financial (WLFI) and closely linked to the family of Donald Trump, temporarily deviated from its dollar peg on Monday. According to CoinGecko, the price dropped to $0.994 at one point, around 0.6% below its intended level.
The project team said the incident was the result of targeted market manipulation. In a post on X, WLFI stated:
“This morning, a coordinated attack was launched against USD1. The attackers compromised several WLFI co-founder accounts, paid influencers to spread FUD, and opened large WLFI short positions in order to profit from artificially created chaos.”
Despite the turbulence, no major collapse followed. The stablecoin was last trading around $0.999, only marginally below dollar parity. WLFI emphasized that the mint-and-redeem mechanism played a key role in stabilizing the price, allowing holders to redeem tokens at any time for their U.S. dollar equivalent.
USD1 is issued in partnership with crypto custodian BitGo and, with a market capitalization of around $5 billion, ranks among the larger dollar-backed stablecoins. According to BitGo, reserves are backed by short-term U.S. Treasury securities, dollar deposits, and other cash equivalents.
However, USD1 still lags well behind market leaders Tether (USDT) and Circle (USDC). Against the backdrop of the alleged crypto attack, WLFI struck a defiant tone, stating:
“No scammer can shake the long-term commitment of the entire WLFI team and its co-founders to USD1.”
