World Liberty Financial, the Trump family’s cryptocurrency project, experienced a “coordinated attack” on Monday that briefly destabilized its USD1 stablecoin. The stablecoin dipped below its $1.00 peg amid mass selling by holders, while posts mentioning the project were deleted from co-founder Eric Trump’s social media account. The project attributed the incident to hackers and market manipulation, claiming its infrastructure held. Despite the USD1 token recovering its peg, over $270 million exited the stablecoin, and the project’s WLFI governance token dropped over 8%.
The Trump family’s crypto project, World Liberty Financial, is reeling after a “coordinated attack” briefly knocked its flagship USD1 stablecoin off its target dollar value. At around 1 pm London time on Monday, posts mentioning the project started disappearing from co-founder Eric Trump’s account.
At the same time, USD1 holders began dumping their tokens en masse, pushing the stablecoin down to just over $0.99. “Attackers hacked several WLFI cofounder accounts, paid influencers to spread FUD, and opened massive WLFI shorts to profit from the manufactured chaos,” a Monday post from the official World Liberty Financial account stated.
The USD1 stablecoin has since returned to its targeted dollar value. Yet investors have already pulled out over $270 million from the Trump stablecoin since the incident. The project’s governance token, WLFI, shed more than 8% of its value in the aftermath.
“All USD1 funds remain completely safe, secure, and fully backed. Our infrastructure and team operated exactly as designed,” World Liberty Financial said on social media. Unusual activity on Eric Trump’s account added to investor anxiety as several recent posts that mentioned the project were deleted.
The alleged attack comes as the project faces allegations of insider dealing. A recent investigation alleged that Abu Dhabi royal Sheikh Tahnoon bin Zayed Al Nahyan secretly signed a deal to purchase a 49% stake in World Liberty Financial for $500 million. Critics have tied the transaction to a landmark artificial intelligence deal involving advanced AI chips.
Earlier in November, an investigation tied a $2 billion investment deal between Binance and Abu Dhabi’s MGX to a presidential pardon given to the crypto exchange’s founder, Changpeng Zhao. Critics say the deal, which was conducted with USD1, was done as a favor in exchange for the pardon.
