World Liberty Financial (WLFI), the crypto protocol backed by the family of President Trump, announced that it successfully defended against what it described as a coordinated, multi-front attack aimed at destabilizing its USD1 stablecoin and crashing the price of its $WLFI token.
According to official statements from the WLFI team, the attack attempted to manufacture panic across both social and market channels.
Latest: @worldlibertyfi says USD1 was targeted in a coordinated attack this morning.
According to the team, attackers allegedly hacked several WLFI cofounder accounts, paid influencers to spread FUD, and opened large $WLFI short positions in an attempt to profit from market… pic.twitter.com/LBIAJkI1Hp
— CoinDesk (@CoinDesk) February 23, 2026
Three-Pronged Attempt to Trigger Market Panic
WLFI outlined three primary tactics allegedly used by the attackers:
- Account Breaches
Hackers reportedly compromised social media accounts belonging to several WLFI co-founders, publishing fraudulent messages designed to spread fear, uncertainty, and doubt (FUD). - Paid Disinformation Campaign
The team claimed that certain influencers and Key Opinion Leaders (KOLs) were allegedly bribed to amplify negative narratives and increase investor anxiety. - Aggressive Short Positions
Attackers allegedly opened large short positions on the $WLFI token, seeking to profit from a price collapse driven by the coordinated misinformation campaign.
USD1 Briefly Depegs, Then Recovers
During the incident, the USD1 stablecoin briefly slipped from its $1 peg, falling to approximately $0.994, a decline of about 0.6%. The token quickly recovered to around $0.998, limiting the impact of the attempted disruption.
Developers credited the rebound to USD1’s mint-and-redeem mechanism, which allows holders to exchange the stablecoin 1:1 for U.S. dollars. This direct convertibility mechanism acted as a stabilizing force, preventing deeper depeg pressure.
WLFI also emphasized that USD1 remains fully collateralized by approximately $5 billion in short-term U.S. Treasuries and cash deposits, held in partnership with BitGo.
Broader Market Context
The incident occurred during a week of heightened market stress, with the Crypto Fear and Greed Index recently hitting a record low of 5, signaling extreme fear across digital asset markets.
It is not the first security-related challenge for WLFI. In late 2025, the project burned $22.1 million in tokens following a phishing attack that compromised user wallets before the platform’s official launch.
Official Guidance to Users
WLFI has urged users to rely exclusively on verified official communication channels and to ignore unauthorized promotional content that may appear on compromised accounts.
While the attempted disruption caused a temporary deviation in USD1’s price, the protocol’s defense mechanisms appear to have limited the broader market impact.
