USD1 Stablecoin slipped below its $1 peg on Monday. World Liberty Financial has alleged that the fall resulted due to a coordinated attack on the protocol. The firm backed by the Trump family assured holders that the stablecoin is fully backed 1:1 with reserves which are compliant to the GENIUS Act.
As per the data available on TradingView, the USD1 stablecoin briefly dropped to $0.9934 but has since rebounded to reclaim its dollar peg. World Liberty Financial, the issuer of the stablecoin, acknowledged the issue in an X post stating that several accounts belonging to its co-founders were hacked. It also said that influencers had been paid to spread doubt about the project.
This development comes just days after the inaugural WLFI Forum, which was held last week. The team also claimed that short positions were placed against the platform’s native token, i.e. WLFI.
They claimed that there was an attempt to cause panic and profit from volatility. However, the attempt was not successful, the team said.
According to the team, the project highlighted the USD1 Stablecoin’s mechanism of minting and redemption in its statement. It said the token was still fully backed 1:1. The model helped stabilize trading conditions.
Zach Witkoff, World Liberty Financial’s co-founder, also addressed the depeg, noting that the stablecoin is 100% backed and 100% verifiable.
“USD1 was built to set a new standard, in which it is supposed to be GENIUS-compliant, fully backed and completely transparent. We are proud to be the most transparent stablecoin in the market,” he added.
In an X post, analyst Wise Advice provided additional details on market activity. The analyst pointed out a deleted retweet about new USD 1 trading pairs on Binance, which had triggered panic.
The deletion of this tweet was a concern among traders. There was, however, minimal structural stress.
No whale sales above $50,000 were recorded during the event. The analyst highlighted that there were no major liquidity withdrawals. There were 70 small swaps on Solana, with most of them below $10,000.
There were also no substantial Ethereum transactions related to the token. Supply metrics remained unchanged. The supply of USD1 remained at 2.1 billion tokens, and the supply of WLFI remained at 99.9 billion tokens.
The USD1 stablecoin is among the fastest growing, hitting a $5 billion market cap last month even as World Liberty Financial pushes for a bank charter.
CoinMarketCap data shows the market cap has dropped to around $4.8 billion, ranking behind USDT, USDC, USDe and DAI in terms of market capitalization.
World Liberty Financial would be able to hold its stablecoin reserves if it were granted a bank charter. Democrats like Elizabeth Warren, meanwhile, are still opposing the firm’s application because they are worried about Trump’s connections to the firm.
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