USD1 Stablecoin Depeg Triggers Market Confidence Concerns

A brief depeg of the USD1 stablecoin, issued by World Liberty Financial (WLFI), has raised concerns about market confidence in the cryptocurrency space.

The incident occurred on February 23, when the token's price briefly fell to around $0.994 before quickly recovering to its original parity value of $1.

According to WLFI, a coordinated attack compromised several cofounder accounts and spread false information to spark panic selling and drive down the token's price.

The company claims that its stablecoin maintains full 1:1 reserves, unlike algorithmic stablecoins like TerraUSD, which relied on arbitrage mechanisms rather than direct asset backing.