sandmark.com
World Liberty Financial is working to reassure investors after a significant security breach and market manipulation event.
The digital asset venture co-founded by the Trump family claims a coordinated attack on its $USD1 stablecoin on 23 Feb was successfully thwarted, although the incident temporarily broke the token's dollar peg and weighed heavily on the project's governance token.
The project announced on the X platform that attackers hacked several co-founder accounts, paid influencers to spread fear and doubt and opened massive short positions to profit from the resulting market volatility. Launched in March 2025, $USD1 operates as the cornerstone of the Trump family's crypto enterprise and is currently ranked as the fifth-largest stablecoin by market capitalization.
A temporary break in the peg
Despite the confident public statements from the World Liberty team, the incident successfully knocked $USD1 off its peg to a low of approximately $0.994. The organization credited the subsequent recovery to the coin's mint-and-redeem mechanism and full one-to-one backing, noting that the stablecoin was back to trading steadily at par.
The project has not elaborated on the exact identity of the attackers or how the founders' accounts were compromised. A statement from a spokesperson given to Bloomberg described the attack as coming from multiple vectors and praised the internal engineering and security teams for defending the token.
High stakes and offshore deals
The stakes for maintaining market confidence in $USD1 are high. The stablecoin is deeply embedded in a number of prominent partnerships that the venture is actively promoting to institutional allocators.
As Sandmark previously reported, the company announced a collaboration with financial services firm Apex Group in February to explore using the token for payment rails and a potential listing of tokenized assets on the London Stock Exchange's Digital Market Infrastructure platform.
There are also publicized plans for a new foreign exchange trading platform called World Swap that would be backed by $USD1. Zach Witkoff, the chief executive and co-founder of the project, revealed the plan during the Consensus Hong Kong conference earlier this month. Furthermore, the stablecoin is already being used to facilitate large offshore transactions, including a $2bn investment deal between Abu Dhabi's MGX fund and Binance.
Token price reflects investor caution
While the stablecoin peg may have technically recovered, the broader market appears cautious regarding the project's resilience. The native governance token indicates that investor sentiment remains fragile.
The WLFI token was down nearly 6% over the past 24 hours, trading at around $0.11 according to CoinMarketCap data. This represents a substantial decline from its initial launch price of $0.31 in February 2025. While the founders highlight a thwarted attack on social media, the market metrics suggest that retail investors remain wary of the asset's structural stability.