USD1, a stablecoin associated with former President Donald Trump, experienced a brief dip below its intended $1.00 price peg on Monday morning. The asset fell to a low of $0.9942 before quickly recovering its value within a few hours.
The decentralized finance (DeFi) project, World Liberty Financial (WLFI), which issues USD1, reported that this price fluctuation was the result of a “coordinated attack” orchestrated by hackers. According to WLFI, “Attackers hacked several WLFI cofounder accounts, paid influencers to spread FUD, and opened massive WLFI shorts to profit from the manufactured chaos. It didn”t work. Thanks to USD1″s sound mint-and-redeem mechanism and full 1:1 backing, we are trading steadily at par.” This statement underscores the resilience of the stablecoin amidst external pressures.
Launched in early September, WLFI”s native token has been a focal point of attention following its public trading debut. Over the past year, a corporate entity affiliated with Trump, known as DT Marks DEFI LLC, has reduced its equity stake in World Liberty Financial. Initially holding a 60% interest in the DeFi venture, DT Marks now controls approximately 38% of the equity in WLF Holdco LLC, which is the sole member of World Liberty Financial.
Interestingly, while DT Marks retains significant equity, the platform”s disclosures clarify that neither Trump nor his family members hold positions as officers, directors, or employees of WLF Holdco LLC or World Liberty Financial. Nevertheless, the DeFi project”s website indicates that DT Marks DEFI LLC and certain family members of Donald J. Trump collectively own 22.5 billion WLFI tokens, highlighting a substantial ongoing connection to the project.
As the situation unfolds, the incident serves as a reminder of the vulnerabilities that even stablecoins can face from cyber threats and market manipulation tactics. Investors and users are advised to remain vigilant and informed about the dynamics within the crypto space, particularly concerning emerging projects like USD1.
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