World Liberty Financial (WLFI), the decentralized finance venture linked to U.S. President Donald Trump and his family, says it has pushed back what it describes as a coordinated, multi-front attempt to destabilize its ecosystem.
Key Takeaways
- WLFI says it stopped a coordinated attack targeting USD1 and the $WLFI token.
- USD1 briefly dipped below $1 to around $0.994 but recovered within hours.
- $WLFI fell about 7–8% before partially rebounding.
- No smart contracts or treasury wallets were breached, according to the team.
In a statement released on February 23, 2026, the team said attackers tried to break the $1 peg of its USD1 stablecoin while simultaneously driving down the price of its native $WLFI token. According to the project, the goal was to spark panic selling and profit from short positions opened during the turmoil.
How the Attack Unfolded
WLFI characterized the episode as a deliberate effort to “manufacture chaos” across several fronts at once.
Hackers reportedly gained unauthorized access to the X accounts of multiple co-founders, using the compromised profiles to spread misleading information about the protocol’s stability. At the same time, the team claims that certain social media influencers were paid to amplify negative narratives around USD1 and the broader project.
On-chain data also pointed to sizable short positions being opened against the $WLFI token, suggesting that some traders were positioned to benefit from a sharp decline triggered by fear and uncertainty.
Market Reaction: Brief Depeg, Token Drop
The turbulence had an immediate but short-lived market impact.
USD1, designed to maintain a strict 1:1 parity with the U.S. dollar, slipped below its peg during the episode. On some exchanges, it reportedly fell to around $0.994 before recovering back to $1 within hours.
The $WLFI token saw a steeper reaction. Prices dropped roughly 7% to 8%, touching near $0.107 before rebounding toward the $0.113 range as conditions stabilized.
No Smart Contract Breach, WLFI Says
WLFI leadership stressed that the core protocol infrastructure was never compromised.
No smart contracts or treasury wallets were breached, the team said. Instead, the disruption was limited to social media accounts and market sentiment.
The project credited USD1’s recovery to its mint-and-redeem structure and its claimed 1:1 backing with U.S. dollars and short-term Treasuries held by custodian BitGo. Engineering teams also moved to support liquidity pools during the volatility, helping restore confidence.
Mounting Pressure Beyond the Attack
The incident comes at a sensitive moment for WLFI.
On-chain investigator ZachXBT has announced a forthcoming report on alleged insider trading at a major crypto firm, scheduled for release on February 26. While no company has been named, speculation online has linked the upcoming findings to WLFI following the attack.
At the same time, Democratic lawmakers are probing a reported $500 million arrangement between WLFI and an Emirati entity, with document requests due by March 1.
Just days before the disruption, WLFI hosted a high-profile forum at Mar-a-Lago attended by hundreds of industry figures, including representatives from Coinbase and Goldman Sachs, underscoring the project’s growing institutional outreach.
For now, WLFI maintains that its systems remain secure and that USD1’s quick return to parity demonstrates structural resilience. Whether the episode leaves lasting reputational damage may depend less on the brief depeg and more on the regulatory and investigative developments still unfolding.
The information provided in this article is for educational purposes only and does not constitute financial, investment, or trading advice. Coindoo.com does not endorse or recommend any specific investment strategy or cryptocurrency. Always conduct your own research and consult with a licensed financial advisor before making any investment decisions.
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Source: https://coindoo.com/trump-linked-defi-project-says-it-stopped-stablecoin-market-manipulation/
