When political influence collides with financial stability on the blockchain, the result is often extreme volatility and high drama. On February 23, 2026, USD1—a stablecoin deeply tied to the family of former US President Donald Trump—broke below its $1 peg in just a few minutes, plunging as low as $0.994. The issuer, World Liberty Financial (WLFI), quickly blamed a "coordinated attack," alleging that hackers breached co-founder accounts, spread panic, and opened short positions for profit. Although the price swiftly recovered, cracks in market confidence for "celebrity-backed" stablecoins became clear. Meanwhile, WLFI’s governance token dropped 4.06% in 24 hours to $0.1086, shrinking its market cap to $2.7B. This article leverages the latest Gate market data to reconstruct the depegging incident, offering an in-depth analysis of WLFI’s price dynamics and outlook.
Event Recap: USD1’s Moment of Crisis
On February 23, 2026, the crypto market witnessed a "blitz attack" targeting a high-profile political project. USD1, a stablecoin issued by World Liberty Financial (WLFI)—a DeFi project with deep involvement from the Trump family—suddenly lost its dollar peg.
According to Gate market monitoring and multiple international media reports, USD1 briefly fell below parity during early morning trading, dropping to about $0.994 before quickly rebounding above $0.999. The entire depegging episode lasted only a few minutes. While a 0.6% dip may seem minor in traditional finance, for a stablecoin whose trust hinges on "1:1 dollar asset backing," such visible depegging instantly triggered market nerves.
Dollar price chart. Source: Gate
Coordinated Attack or Market Panic? WLFI’s Forceful Response
World Liberty Financial (WLFI) wasted no time responding to the incident. Within hours, WLFI issued an emergency statement on X, characterizing the event as a deliberate, multi-pronged "coordinated attack."
WLFI’s statement outlined three main attack vectors:
- Social engineering breach: Attackers targeted X (formerly Twitter) accounts of several WLFI co-founders, attempting to use these high-profile accounts to spread panic and rumors.
- Information warfare and FUD: Hackers hired "paid influencers" to flood communities with false claims about USD1’s reserve shortfall, deliberately creating FUD (fear, uncertainty, and doubt) to induce users to sell.
- Financial sabotage: While fueling short sentiment, attackers opened large short positions on $WLFI tokens, aiming to profit from the chaos they engineered in the market.
WLFI official response, source: WLFI
WLFI spokesperson David Wachsman told the media, "World Liberty’s top engineering and security teams successfully repelled a coordinated attack from multiple fronts today. Our infrastructure and systems operated exactly as designed. USD1’s robust mint and redemption mechanisms, along with full 1:1 asset backing, ensured the stablecoin rapidly returned to its peg."
Under Suspicion: Deleted Posts and Insider Trading Investigation
Despite the official narrative blaming external attackers, market skepticism persisted. Unverified screenshots circulated on social media, suggesting Eric Trump deleted promotional posts related to USD1 during the depegging incident. While there’s no independent evidence to confirm this, such rumors have undoubtedly fueled investor concerns about internal project confidence.
Adding to the uncertainty, renowned on-chain investigator ZachXBT announced plans to release an insider trading report involving a major crypto company later this week. Although he didn’t name the target, the Trump family’s high-profile connection to WLFI led some community members to speculate about a link to the depegging event. The truth remains to be seen, pending further on-chain disclosures.
Deep Dive: The Fundamental Differences Between USD1 and UST
Many investors drew parallels between this episode and TerraUSD (UST)’s death spiral in 2022. However, the two stablecoins differ fundamentally in their asset structures.
- UST (algorithmic stablecoin): Relied on complex algorithms and arbitrage mechanisms (backed by LUNA tokens). When market confidence collapsed, the algorithm failed, triggering an endless minting death spiral.
- USD1 (fiat-collateralized stablecoin): WLFI claims USD1 uses a traditional US Treasury cash reserve model, with full backing by short-term US Treasuries and dollar cash held by BitGo.
USD1’s rapid recovery demonstrated that its on-chain redemption mechanism and liquidity pools remained effective under extreme stress. Yet, the lifeblood of any stablecoin is "trust." If subsequent investigations reveal internal control issues or the Trump family distances itself from the project, USD1’s $4.8 billion market cap fortress could face a real test.
WLFI Token Market Analysis
The incident not only affected USD1’s reputation but also directly impacted WLFI, World Liberty Financial’s governance token. Gate market data shows that despite sharp volatility, WLFI tokens showed signs of weak rebound after panic selling.
As of February 24, 2026, World Liberty Financial (WLFI) was trading at $0.1086, with a 24-hour trading volume of $6.31M, indicating sustained market interest.
Key Market Data
- Current price: $0.1086
- Market cap: $2.7B (market share 0.47%)
- 24-hour price change: -4.06%
- 24-hour trading volume: $6.31M
Price Range
- 24-hour high: $0.1177
- 24-hour low: $0.1074
Historical Price Review
Following the panic selling triggered by the "coordinated attack" on February 23, WLFI briefly hit a low. Historical data shows WLFI’s all-time low at $0.0706, with an all-time high of $1.1. The current price remains far below its peak, reflecting an ongoing cycle of value discovery and confidence rebuilding.
WLFI Price Forecast (2026 - 2031)
Forecasting WLFI’s future requires factoring in the aftermath of this attack and broader market conditions. Based on current data models, opinions diverge on WLFI’s long-term trajectory, but the overall outlook leans toward gradual recovery.
2026 price prediction:
WLFI’s average price is expected to hover around $0.1088 in 2026. The annual price range may fluctuate between $0.07507 and $0.1403. This suggests that, in the short term, WLFI may consolidate near the bottom as it absorbs selling pressure from negative news.
Long-term outlook (through 2031):
If WLFI successfully resolves the trust crisis and continues to expand USD1’s use cases, its price could gradually climb to $0.3286 by 2031. Compared to current levels, this represents a potential return of +126.00%. This growth projection is based on the Trump family’s sustained political influence, regulatory progress, and maturing DeFi ecosystem.
Conclusion
For investors, the "coordinated attack" on the Trump family project serves as a textbook risk lesson. It reveals that even stablecoins backed by top resources and full reserves aren’t immune to depegging shocks in the age of social media. WLFI managed heavy redemptions and maintained system stability within 24 hours, demonstrating technical resilience. However, the uncertainty surrounding ZachXBT’s investigation report remains a Damocles’ sword hanging over the project.
