Trump family-linked stablecoin briefly depegs; WLFI cites 'coordinated attack'

The USD1 stablecoin briefly lost its dollar peg on February 23, dipping to about $0.994 before quickly recovering to near parity. The disruption appears to have lasted only minutes; USD1 is issued by World Liberty Financial (WLFI), a DeFi project linked to business entities associated with Donald Trump and his family, and carries a market capitalization near $4.8 billion.

WLFI responded within hours, blaming what it called a coordinated attack. The company said attackers compromised several cofounder accounts, paid influencers to spread false information and opened large short positions to profit from panic selling, and added that USD1’s mint-and-redeem mechanism helped restore the peg.

The episode prompted comparisons to early warning signs seen before the collapse of algorithmic stablecoins such as TerraUSD in 2022, though WLFI says USD1 differs structurally by maintaining full 1:1 reserves rather than relying on arbitrage.

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