USD1 Stablecoin Briefly Loses $1 Peg: WLFI Alleges “Coordinated Attack” - Yahoo Finance

In a volatile session, USD1, the stablecoin launched in March 2025 by the Trump family’s World Liberty Financial (WLFI), slipped below its $1.00 target.

According to the team at World Liberty Financial (WLFI), bad actors attempted to manipulate the liquidity pools that sustain USD1’s price. There have been similar incidents in the past, where attackers have tried to drain liquidity to trigger a panic sell spiral.

Stablecoins have one job: stay at exactly one dollar. When that fails, panic usually follows instantly. That is exactly what happened to the WLFI stablecoin, USD1, which briefly lost its peg in what the team is calling a deliberate, malicious strike.

On 23 February 2026, the WLFI team took to X to say, “For clarity: no WLFI or USD1 smart contracts or wallets were hacked. Today’s incident 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.”

DISCOVER: The Best Crypto Exchanges for 2026

WLFI Alleges, A Targeted Attempt To Destabilize USD1

While depegs (losing the $1 price) are not unheard of, the response from the issuer was specific. World Liberty Financial claims this was not just natural market selling, but a targeted attempt to destabilize the asset.

We saw similar resilience when Binance faced its own stress test, proving that centralized entities often have to actively defend their reserves against market panic. The USD1 team acted quickly to stabilize the floor, but the incident highlights how fragile confidence can be.

For example, on X, we see investors being suspicious over WLFI’s explanations and not thoroughly convinced with it.

Notably, USD1 recovered quickly, suggesting that the backing mechanisms worked.

DISCOVER: How to Buy Bitcoin Anonymously (Step-by-Step Guide)

Not The First Controversy Around Trump’s WLFI

Just four days before Donald Trump’s second inauguration in January 2025, representatives tied to Abu Dhabi royal Sheikh Tahnoon bin Zayed Al Nahyan quietly signed an agreement to buy a 49% stake in the Trump family’s crypto project WLFI, for $500 million.

The timing of the UAE WLFI deal is what people found critical. The agreement came shortly before the US approved the UAE’s access to a large annual allocation of advanced American AI chips, which are subject to strict export controls. Sheikh Tahnoon, who heads UAE national security efforts and oversees major investment funds, backed the purchase through Aryam Investment. Reports note that two of his associates joined the WLFI board following the investment. When the details came to light, it delayed the CLARITY ACT.