- USD1 slipped to 0.98 during a coordinated attack but quickly regained its dollar peg on major exchanges.
- Attackers used account breaches, social media pressure, and short bets to trigger panic in WLFI markets.
- Binance holds about 87% of USD1 supply which keeps market focus on liquidity and stability.
World Liberty Financial reported a coordinated attack on its USD1 stablecoin on February 23. The incident briefly pushed the token below its dollar peg. USD1 fell near $0.98 on major exchanges before quickly recovering. The price returned close to one dollar within minutes.
The company said attackers combined several tactics to trigger panic. The effort included account takeovers and social media manipulation. It also involved large short bets against the WLFI ecosystem token. According to the firm, the strategy aimed to weaken confidence and profit from volatility.
On the morning of the incident, traders noticed sudden selling pressure. As a result, USD1 slipped below its one to one value with the U.S. dollar. However, buyers stepped in quickly and restored balance. The peg stabilized shortly after the decline.
Account Breaches and Short Positions Add Pressure
World Liberty Financial stated that attackers compromised several co-founder accounts. They also paid individuals to circulate alarming posts across social platforms. At the same time, they opened significant short positions against WLFI. This coordinated activity increased pressure on both tokens.
The company linked the price swing to heavy trading and rapid shifts in sentiment. Liquidity conditions amplified volatility during the episode. Nevertheless, the firm maintained that USD1 remained fully backed at all times. It also pointed to its mint and redeem structure as a stabilizing mechanism.
The WLFI token fell about 7% during the turmoil. Later in the session, it recovered part of those losses. At the time of reporting, WLFI traded at $0.1117. The token showed a 1.43% decline over the past 24 hours.
Binance Supply Share and Recent Forum in Focus
The incident followed a high profile crypto forum hosted by World Liberty Financial. The event took place at Mar a Lago in Florida. It brought together figures from government, finance, and the digital asset industry. Former Binance chief executive Changpeng Zhao attended after receiving a presidential pardon in October.
Earlier, Forbes reported that Binance controlled nearly 87% of USD1 supply. At that time, the circulating supply stood near $4.7 billion in value. That supply concentration has drawn attention within the market. Traders reacted quickly as volatility emerged across exchanges.
