USD1, the dollar-backed stablecoin issued by World Liberty Financial — a crypto venture with ties to U.S. President Donald Trump’s family — briefly lost its $1 peg on Monday as the project’s team alleged a coordinated attempt to undermine the protocol.
Data from CoinGecko shows the token dropped to $0.994 at its lowest point, roughly 0.6% below its intended dollar value. Although it later rebounded, USD1 continued to trade slightly under peg at around $0.998.
In a post on X, the developers claimed that multiple co-founder accounts had been hacked, social media influencers were incentivized to spread uncertainty, and traders opened short positions on WLFI, the protocol’s native token. The team characterized the activity as a deliberate effort to spark panic and profit from market turbulence.
Despite the volatility, the project said its built-in redemption mechanism — which allows holders to swap USD1 for U.S. dollars on a one-to-one basis — helped stabilize the token.
USD1 is issued in collaboration with digital asset custodian BitGo and is backed 1:1 by short-term U.S. Treasuries, dollar deposits and other cash equivalents. Monthly reserve attestations are provided by consulting firm Crowe, according to BitGo.
With a market capitalization of about $5 billion, USD1 ranks among the larger dollar-pegged stablecoins, though it remains behind market leaders such as Tether’s USDT and Circle’s USDC.
