USD1 Slides Below $1 as Project Claims Influencer-Driven Attack and Shorting Scheme

TL;DR:

• The USD1 token dropped to $0.994 following hacks on co-founders’ accounts and disinformation campaigns.
• Developers denounce a short-selling strategy designed to trigger market panic.
• The 1:1 dollar redemption mechanism successfully stabilized the asset despite heavy selling pressure.

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This Monday, the World Liberty Financial USD1 stablecoin lost its one-dollar peg, sending ripples through the crypto market. The protocol, closely linked to President Trump’s family, is experiencing unusual volatility that dragged the token’s price to lows of $0.994.

A coordinated attack was launched against USD1 this morning. Attackers hacked several WLFI cofounder accounts, paid influencers to spread FUD, and opened massive $WLFI shorts to profit from the manufactured chaos.

It didn’t work.

Thanks to USD1’s sound mint-and-redeem mechanism…

— WLFI (@worldlibertyfi) February 23, 2026

Information from the team behind the project reveals that this was not a technical error, but rather a premeditated offensive to undermine confidence in the WLFI ecosystem. Developers reported that several co-founders’ accounts were compromised to spread false messages and generate uncertainty.

Additionally, they reported that influencers were hired to coordinate doubt-sowing campaigns while large short-selling positions were opened. Despite these efforts, the team asserts that the attack failed, thanks to the strength of its institutional reserves managed by BitGo.

BitGo Reserves and Market Defense Mechanisms

Despite the momentary dip, the World Liberty Financial USD1 stablecoin is backed by dollar deposits and U.S. Treasury bonds. Because of this, the redemption mechanism functioned correctly, allowing users to exchange their assets without significant losses.

USD1’s market capitalization currently stands at $5 billion, positioning it as a major competitor against giants like USDT or USDC. However, this type of attack highlights the reputational risks faced by projects with high political exposure.

In summary, the token has begun to recover, trading very close to its parity target while monthly audits by the firm Crowe continue to back its funds. The resilience demonstrated will be key in determining whether investors maintain their trust in this ambitious crypto protocol.