USD1 stablecoin suddenly decouples and drops below $1: WLFI claims coordinated attack, Trump-themed coins raise concerns

When political influence and financial stability collide on the blockchain, it often leads to extreme volatility and drama. On February 23, 2026, a stablecoin called USD1, deeply linked to the family of former U.S. President Donald Trump, dropped below its $1 peg within minutes, reaching a low of $0.994. The issuer, World Liberty Financial (WLFI), quickly blamed a “collaborative attack,” claiming hackers infiltrated co-founders’ accounts, spread panic, and opened short positions for profit. Although the coin’s price recovered swiftly, market confidence in “celebrity-backed” stablecoins had already been shaken. Meanwhile, WLFI’s governance token price fell 4.06% in 24 hours to $0.1086, with a market cap shrinking to $2.7 billion. This article combines the latest data from Gate to reconstruct the full picture of the decoupling event and analyze WLFI’s price fluctuation logic and future prospects.

Event Recap: The USD1 Shock Moment

On February 23, 2026, the crypto market witnessed a “lightning attack” targeting a politically connected project. The stablecoin USD1, issued by the DeFi project World Liberty Financial (WLFI), which is heavily involved with Donald Trump’s family, suddenly lost its dollar peg in a short period.

According to Gate data and multiple foreign media reports, USD1 briefly fell below $1 during Monday morning trading, bottoming out around $0.994, then quickly rebounded above $0.999. The entire decoupling process lasted only a few minutes. While a 0.6% decline may seem minor in traditional finance, for a stablecoin backed 1:1 by dollar assets, this visible decoupling instantly triggered market sensitivity.

USD1 price chart. Source: [Gate]()

“Collaborative Attack” or Market Panic? WLFI Official’s Firm Response

In response to the sudden event, WLFI did not remain silent. Hours after the incident, WLFI issued an emergency statement on X (formerly Twitter), characterizing the event as a premeditated, multi-pronged “collaborative attack.”

According to WLFI, the attack involved three main vectors:

• Social engineering intrusion: Hackers targeted several WLFI co-founders’ X accounts, attempting to spread panic and false rumors.
• Public opinion warfare and FUD spreading: The hackers hired paid influencers to disseminate false information about USD1’s reserve insufficiency, creating FUD (fear, uncertainty, doubt) to induce sell-offs.
• Financial sabotage: Simultaneously, attackers opened large short positions on WLFI tokens, aiming to profit from artificially induced price chaos.

WLFI official response, source: WLFI

WLFI spokesperson David Wachsman emphasized in a statement to the media: “World Liberty’s top engineering and security teams successfully repelled a coordinated attack from multiple angles today. Our infrastructure and systems withstood the test, operating exactly as designed. The healthy minting and redemption mechanisms of USD1, fully backed 1:1 by assets, ensured the stablecoin quickly returned to its peg.”

Cloud of Suspicion: Deleted Posts and Insider Trading Investigations

Although the official explanation attributes the event to external hacking, market suspicion remains. Unverified screenshots circulated on social media suggest that Eric Trump deleted related promotional posts during USD1’s decoupling. While no independent evidence confirms this, such rumors have heightened concerns about internal confidence within the project.

Meanwhile, well-known on-chain investigator ZachXBT has added uncertainty by announcing plans to release an insider trading investigation report involving a major crypto company later this week. He did not specify targets, but given WLFI’s connection to the Trump family’s high-profile traffic, some community members have linked him to this decoupling event. The truth remains to be seen as further on-chain data is disclosed.

In-Depth Analysis: The Fundamental Differences Between USD1 and UST

Many investors have compared this incident to the death spiral of TerraUSD (UST) in 2022. However, there are fundamental differences in their underlying asset structures:

• UST (algorithmic stablecoin): Relies on complex algorithms and arbitrage mechanisms (backed by LUNA tokens). When market confidence collapses, the algorithm fails, leading to an infinite minting death spiral.
• USD1 (fiat-collateralized stablecoin): WLFI claims USD1 is backed by traditional U.S. Treasury cash reserves, stored in short-term U.S. government bonds and USD cash managed by BitGo.

The rapid recovery of USD1 demonstrates that its on-chain redemption mechanism and liquidity pools remained effective under extreme stress. However, the stability of a stablecoin depends on “trust.” If subsequent investigations reveal internal control issues or signs of distancing by the Trump family, the $4.8 billion market cap of USD1 could face a real test.

WLFI Token Market Analysis

This incident not only damaged USD1’s reputation but also directly impacted WLFI’s governance token. According to Gate data, despite intense market volatility, WLFI showed a weak rebound after panic selling.

As of February 24, 2026, WLFI’s latest trading price is $0.1086. Its 24-hour trading volume reached $6.31 million, indicating sustained market interest.

Key Market Data

• Current Price: $0.1086
• Market Cap: $2.7 billion (market share 0.47%)
• 24-hour Price Change: -4.06%
• 24-hour Trading Volume: $6.31 million

Price Range

• 24-hour High: $0.1177
• 24-hour Low: $0.1074

Historical Price Review

Following the panic sell-off triggered by the February 23 “collaborative attack,” WLFI’s price dipped to a low point. Historical data shows the lowest price was $0.0706, with a high reaching $1.10. The current price remains far below the all-time high, reflecting that the project is still in a phase of value discovery and confidence rebuilding.

WLFI Future Price Forecast (2026–2031)

When considering WLFI’s future trajectory, it’s essential to factor in the ongoing impact of this attack and macro market conditions. Based on current models, market opinions vary, but the overall outlook leans toward a gradual recovery.

2026 Price Forecast:

It is expected that WLFI’s average price in 2026 will hover around $0.1088. The annual fluctuation range might be between $0.07507 and $0.1403. In the short term, WLFI could oscillate at the bottom to digest the selling pressure caused by this negative news.

Long-term Outlook (to 2031):

If WLFI successfully resolves the trust crisis and continues expanding the use cases for USD1, by 2031, its price could gradually rise to approximately $0.3286. This represents a potential return of +126.00% from current levels. Such growth depends on the Trump family’s ongoing political influence, regulatory progress, and the maturation of the DeFi ecosystem.

Conclusion

For investors, the “collaborative attack” on the Trump family project serves as a classic risk education case. It reveals that even top-tier resources and full-reserve-backed stablecoins are not immune to decoupling shocks in the social media era. WLFI’s ability to handle large redemption volumes and maintain system stability within 24 hours demonstrates technological resilience; however, uncertainties surrounding ZachXBT’s investigation remain a Damocles sword hanging over the project.