USD1, the U.S. dollar stablecoin of World Liberty Financial — a crypto protocol with close links to President Donald Trump’s family — slipped from its $1 peg on Monday amid what the project’s developers described as a “coordinated attack” against the protocol.
The token fell to as low as $0.994 during the day, some 0.6% from its intended $1 anchor, CoinGecko data shows.
In a Monday X post, the team behind USD1 said multiple cofounder accounts were hacked, influencers were paid to sow doubt, and short positions were opened against the protocol’s native token, WLFI, in what they framed as a deliberate effort to stir panic and profit from it.
“It didn’t work,” the post said, saying that a redemption mechanism that allows USD1 holders to exchange their tokens for an equal amount of U.S. dollars as the reason the peg held firm.
However, the token still traded at $0.998, some 0.2% below its intended $1 price anchor, CoinGecko shows, which gathers price data from exchange pairs.
USD1, issued in partnership with crypto custodian BitGo (BITG) is among the largest dollar-backed stablecoins. Its value is backed 1:1 by short-term U.S. government treasuries, U.S. dollar deposits and other cash equivalents and reports monthly attestations of its reserve signed by consulting firm Crowe, according to BitGo. The token currently has a $5 billion market capitalization, but it still trails major players like Tether’s USDT and Circle’s (USDC).
Read more: Goldman Sachs, Franklin Templeton, and Nicki Minaj: Inside Trump’s surreal Mar-a-Lago crypto summit
UPDATE (Feb. 23, 16:00 UTC): Adds details about USD1’s backing.
www.coindesk.com
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