World Liberty Financial (WLFI), the Trump family-linked crypto project, issued a second statement on X to clarify that the USD1 stablecoin's smart contracts and wallets were never compromised. The clarification came after USD1 briefly depegged to 0.9802 USDT on Binance, a deviation of roughly 2%, and recovered its full peg within 30 minutes.
Attack Method: Account Takeover, Short Selling, and FUD
According to WLFI and community sources, attackers executed a “coordinated attack” on the evening of the 23rd. They first gained unauthorized access to the X accounts of multiple co-founders and used them to spread false information. Simultaneously, attackers opened large short positions on the WLFI token, aiming to profit from panic selling. Some paid influencers (KOLs) also helped spread fear, uncertainty, and doubt (FUD).
The attack caused USD1 to drop to $0.9802 on Binance, while the WLFI token fell over 8% at one point. However, the market quickly absorbed the panic, and USD1 returned to its 1:1 peg within 30 minutes, leaving short sellers without the expected profits.
WLFI Official: Contracts and Wallets Unaffected
In its latest statement, WLFI said: “Neither the WLFI nor the USD1 smart contracts or wallets were hacked. The previously disclosed incident only involved unauthorized access to the project co-founders' X accounts, not an attack on the wallet or protocol infrastructure. All smart contracts remain unaffected.” The statement further emphasized that all USD1 funds are “fully secure and reliable, backed by sufficient reserves,” which are 100% collateralized by U.S. short-term Treasury bonds and dollar deposits. Team infrastructure and operations remain fully normal.
The carefully orchestrated attack ultimately failed: USD1 rapidly re-pegged and the WLFI token stabilized. The incident highlights the importance of social media account security for crypto projects and reveals the increasingly sophisticated tactics of market manipulators.
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