World Liberty Financial $WLFI said a coordinated attack on February 23, 2026 attempted to destabilize its $USD1 stable coin through hacked cofounder accounts, paid influencer FUD, and large short positions against $WLFI, but the token maintained its 1:1 dollar peg throughout the volatility.
Background on $USD1
Launched in March 2025, $USD1 is designed as a fully backed stablecoin pegged 1:1 to the US dollar using cash equivalents, supported by a mint and redeem mechanism that allows direct conversion at par and aims to bridge traditional finance with decentralized infrastructure.
Details of the February 23 Incident
According to WLFI’s official statement, attackers compromised several cofounder social accounts, amplified fear and uncertainty across X, and opened sizable short positions in $WLFI to capitalize on panic selling. The platform described the episode as a coordinated social and market manipulation attempt rather than a technical exploit of reserves or smart contracts.
Market Reaction and Stability
Real time X chatter showed brief speculation of depegging, but USD1 continued trading at $1, with no confirmed reserve shortfalls. Users referenced the stablecoin’s full collateral backing and mint redeem safeguards, and some stepped in to buy during the volatility, helping stabilize sentiment.
Security Warnings and Broader Implications
WLFI urged users to rely only on verified channels amid phishing risks, highlighting how coordinated misinformation and leveraged trading strategies can create short term instability even when a stablecoin’s reserves remain intact. The incident underscores the role of transparency and redemption design in maintaining confidence during stress events.