Trump-backed stablecoin falls below $1 before rebound

The US$1 stablecoin, backed by World Liberty Financial, briefly fell below US$1 on February 23, reaching around US$0.99 before recovering.

A company spokesperson said its engineering and security teams successfully repelled a coordinated attack, and no smart contracts or wallets were compromised.

The firm, co-founded in 2024 by President Donald Trump, his three sons, and partners, confirmed all US$1 funds remain secure and fully backed by reserves.

The stablecoin was last traded at US$1.00, holding its place as the fifth-largest stablecoin by market cap, according to CoinGecko.

The company reported some co-founders’ X accounts were accessed without authorization, but no smart contracts or wallets were affected.

World Liberty emphasized its infrastructure operated as designed during the incident.

🔗 Source: Reuters

🧠 Food for thought

Implications, context, and why it matters.

A minor price wobble masks deeper market tensions

USD1 slipped to $0.9802 USDT on Binance, then climbed back in about 30 minutes 1.
Several analysts called the move routine noise. Some venues saw a dip of about 0.3%, with no sign of redemption stress 2.
World Liberty Financial described a “coordinated attack” that included unauthorized access to some co-founders’ X accounts. It also claimed attackers paid influencers to push negative information and took short positions on its WLFI token 3.
The timing matched online speculation about a possible insider trading report from on-chain investigator ZachXBT (a pseudonymous crypto sleuth known for tracing blockchain transactions). That chatter added to market jitters 4.

When stablecoins become political instruments, their risks change

The episode adds a fresh risk for the digital economy. A stablecoin can face pressure tied to political links, not only reserve backing.
USD1’s connection to the Trump brand may draw politically driven attempts to stir fear and uncertainty. More neutral stablecoins like USDC (USD Coin, a widely used dollar-pegged stablecoin) may face less of that exposure 5.
Trading also put a weak spot in view. USD1 steadied, while the WLFI governance token (a crypto token used for voting on protocol decisions) dropped about 7% 1.
Secure reserves can still leave room for damage. Doubts about management or operational security can spill into the rest of the ecosystem’s value.