World Liberty Financial Reports Hacks, Paid FUD in Alleged USD1 Attack

USD1 briefly dipped to $0.994 after alleged hacks and paid FUD, but quickly rebounded as reserves remained intact.

World Liberty Financial (WLFI) said its dollar-pegged token USD1 faced a coordinated attack early Monday. Hackers allegedly breached several cofounder X accounts and spread false information. Influencers were reportedly paid to amplify fear around the project. At the same time, large short positions in WLFI were opened to profit from volatility.

USD1 Dips Below $1 Following X Account Breach, Rebounds to Par

In a statement posted on X, project leaders claimed attackers attempted to manufacture panic around USD1. As per the notice, compromised accounts were used to spread misleading posts. Afterwards, paid promotion of negative narratives followed.

Meanwhile, the market reaction to the report briefly pushed USD1 off its dollar peg. According to CoinGecko, the fiat-pegged coin fell to $0.994, about 0.6% below $1. However, stability returned later in the day as the price moved back toward par. 

Meanwhile, WLFI has traded relatively flat over the past 24 hours despite the recent incident. Developers said no loss of reserves occurred during the incident.

Image Source: CoinGecko

WLFI said USD1’s mint-and-redeem structure helped contain damage. Full 1:1 backing supports redemptions during stress events. Reserves consist of short-term U.S. Treasuries, dollar deposits, and cash equivalents.

USD1 is also issued in partnership with BitGo, a digital asset infrastructure and financial services company. According to BitGo disclosures, the custodian reports monthly reserve attestations signed by consulting firm Crowe. 

World Liberty Financial Warns Users After Series of Targeted Hacks

As per current market statistics, the token currently holds a market capitalization of around $4.8 billion. Despite its size, USD1 remains smaller than market leaders. Tether’s USDT and Circle’s USDC still dominate stablecoin flows.

Interestingly, the project has recently faced repeated targeted attacks aimed at compromising the network’s integrity. Last September, attackers exploited Ethereum’s EIP-7702 upgrade to steal tokens linked to WLFI. Months earlier, cofounder Zach Witkoff’s X account was hacked and used to promote a fake memecoin tied to Barron Trump.

WLFI said earlier attempts to disrupt operations did not succeed. At the same time, the team urged users to rely only on verified channels for updates.

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