USD1 holds 1:1 peg after organized attack, says WLFI

USD1 stablecoin coordinated attack: what happened and the 1:1 peg

according to Bloomingbit (en.bloomingbit.io), the issuer reported a coordinated attack on February 23, 2026 that involved compromised executive accounts, paid influencer disinformation, and short positions in related tokens. The stated intent was to shake confidence in USD1 during peak liquidity hours and provoke disorderly market activity.

The issuer maintained that USD1’s 1:1 peg remained supported by reserves and standard mint-and-redeem operations designed for stress periods. In practice, arbitrageurs typically exchange below-par USD1 for $1 of backing, reducing discounts and restoring price alignment across venues.

Why it matters for users, liquidity, and market stability

Short-lived depegs can create execution risk for users and protocols that treat USD1 as cash-equivalent collateral. Even minor slippage can affect margin calculations, automated liquidations, and settlement in both centralized and on-chain markets.

Liquidity depth and redemption throughput are critical during stress. If backing is available and redemptions work promptly, arbitrage can close gaps quickly; if not, discounts can persist and spill over into other assets.

A core team member publicly framed the incident as an intentional trust shock rather than a reserve failure. “Someone organized an ‘attack’,” said Dylan, a core member of world liberty Financial.

Immediate impact: sub-$1 prints, quick recovery, Binance context

As reported by Decrypt (decrypt.co), USD1 briefly printed below $1, touching about $0.98 on binance and near $0.994 on some aggregators, before recovering to parity in roughly 30 minutes. The rapid reversion is consistent with active mint-and-redeem arbitrage when reserves and operations remain available.

Based on data from CoinGecko (coingecko.com) in early February 2026, USD1 traded close to its $1 target with about $2.6 billion in daily volume and a market capitalization near $5.0 billion. These figures suggest robust secondary-market depth, which can support faster price normalization after shocks.

Reserves, governance, and verification signals to review now

Reserves backing and transparency claims cited after the incident

Post-incident statements emphasized full reserve backing on a 1:1 basis alongside functioning mint-and-redeem. Users and institutions typically look for independent attestations, clear custody structures, and timely disclosures to corroborate issuer claims during stress events.

While press coverage has highlighted the swift recovery and issuer assertions, external verification remains the anchor for trust in a fiat-redeemable stablecoin. Regular attestations and clear redemption reporting provide observable evidence that peg mechanics work beyond theory.

Governance and regulatory steps WLFI signaled around USD1

Cointelegraph (cointelegraph.com) reported that the issuer has sought a U.S. national trust banking charter to bring mint-and-redeem inside a regulated entity, potentially strengthening oversight and operational resilience. Such a move, if approved, could formalize custodial controls and supervisory review.

Weex (weex.com) noted community concerns around governance practices, including voting dynamics and transparency around reserve reporting. Addressing these points would be consistent with expectations from institutional counterparties and regulators monitoring stablecoin risk controls.

FAQ about USD1 stablecoin

Did USD1 lose its 1:1 peg and for how long on major exchanges like Binance?

It briefly traded below $1, with sub-dollar prints on Binance, and recovered to parity within roughly half an hour.

How do mint-and-redeem and arbitrage mechanisms help USD1 maintain its peg?

If USD1 trades below $1, arbitrageurs redeem and reduce supply; if above $1, they mint and increase supply, pushing the market price back toward $1.