ZachXBT said it will release findings on Feb. 26 involving a major crypto firm and social media speculation linked it to WLFI.
A brief price wobble in a Trump family-linked stablecoin has sparked online speculation, political commentary, and renewed scrutiny of crypto market transparency, but how much of it is fact, and how much is rumor?
On Feb. 23, USD1, a stablecoin issued by World Liberty Financial (WLFI), briefly dipped below its $1 peg before quickly recovering. Around the same time, social media users began circulating claims that Eric Trump had deleted earlier promotional posts about the token.
Separately, blockchain investigator ZachXBT announced an upcoming report into alleged insider trading at a major crypto firm, fueling further speculation.
Here’s what we know, and what remains unproven.
What Happened to USD1?
USD1 is a stablecoin, a type of cryptocurrency designed to maintain a steady value, typically $1, by being backed by real-world assets such as cash or US Treasury securities.
On Feb. 23, USD1 briefly fell below $1, dipping to around $0.98 on Binance during a period of heavy trading. Within minutes, however, it recovered to near $0.999.
WLFI, the decentralized finance (DeFi) platform behind USD1, said the volatility was caused by a “coordinated attack.” According to the company, attackers compromised several co-founder social media accounts, spread false information and opened short positions on WLFI’s governance token, which fell about 7% during the turmoil.
Importantly, WLFI stated that no smart contracts were breached and that USD1 reserves remained intact. The company says USD1 is fully backed 1:1 by dollar-denominated assets, unlike algorithmic stablecoins such as TerraUSD, which collapsed in 2022 after failing to maintain its peg through a complex arbitrage mechanism.
The quick recovery suggests that USD1’s redemption and liquidity systems functioned as designed. In simple terms, when the price dipped, traders were able to buy USD1 at a discount and redeem it for $1 worth of backing assets, pushing the price back up.
Still, even a brief “depeg” can shake confidence, especially in a market where trust is critical.
Did Eric Trump Delete Crypto Promo Posts?
During the volatility, screenshots began circulating online claiming that Eric Trump had deleted older posts promoting USD1.
One recent post from Feb. 23 remains visible, in which Trump described USD1 as “the second largest GENIUS-compliant stablecoin in the market,” highlighting growing volume, exchange integration and “radical transparency including real-time proof of reserves.”
However, claims that earlier promotional posts were removed have not been independently verified. Social media posts can be edited, archived or deleted for many reasons, including routine content management, and no concrete evidence has confirmed that deletions were tied to the depeg event.
It’s important to separate observation from conclusion. Screenshots alone do not prove intent, nor do they confirm a connection between market events and social media activity.
At the time of writing, there is no verified evidence that Eric Trump deleted posts in response to USD1’s brief price drop.
USD1 Holders in Panic
From an on-chain perspective, the USD1 stablecoin chart shows a catastrophic collapse in confidence.
The data shows a massive drop in the Total Amount of Holders, plunging from a steady level near 14.9K to a current low.
This “holder cliff” indicates a coordinated exit by liquidity providers and retail participants alike.
While the price of USD1 has attempted to maintain its $1 peg, the underlying holder metrics suggest the project’s core is hollowing out.
The chart shows minor price volatility. However, the volume of holders exiting the ecosystem is the primary story, suggesting that market participants will rather remain on the sidelines while holding other stablecoins.
Going forward, if the holder count continues to crater, the USD1 peg will likely break permanently, targeting a floor below $0.95.
However, a rise in the total holder count would invalidate the “project collapse” thesis. This would suggest the recent exit was a temporary reaction to FUD, possibly stabilizing the $1 peg.
WLFI Is Not Left Out
Meanwhile, WLFI’s price could also be affected. At the time of writing, WLFI exchange inflow shows a sudden, massive spike in activity that threatens to overwhelm current price support.
Specifically, the Number of Transfers to Exchanges peaked at nearly 800 in a single day, a level significantly above the baseline average.
While it dropped afterwards, it has begun to rise again over the past few days. This influx of tokens onto trading platforms typically signals an immediate intent to sell, creating a “liquidity wall” that the altcoin must absorb to prevent further breakdown.
If sustained, then WLFI’s price could experience an extended correction.
From a technical perspective, indicators across the board confirm a massive exodus of capital and confidence.
The Chaikin Money Flow (CMF) at -0.21 indicates aggressive institutional distribution, showing that “smart money” is exiting positions ahead of the report.
Similarly, the Relative Strength Index (RSI) at 38.83 suggests the token is in a free-fall. However, it has not yet reached the oversold levels required for a reliable bounce.
As shown below, the current price of $0.11 has kept WLFI in a bearish pennant, which typically acts as a continuation pattern for further downside.
If this remains the same, expect WLFI to crash toward its previous all-time low.
To invalidate this bearish structure, WLFI must reclaim the 0.236 Fibonacci level on high volume. If that happens, the token might rise toward $0.18.
Where Does ZachXBT’s Investigation Fit In?
Adding fuel to online speculation, blockchain investigator ZachXBT announced that he will release a report on Feb. 26 alleging insider trading by staff at a “major profitable crypto business.” He did not name the company yet.
Because WLFI experienced volatility just days before the announcement, some social media users speculated that the upcoming report could involve the Trump-linked project. However, there is currently no evidence connecting WLFI to the alleged insider trading claims.
In crypto markets, timing alone often triggers rumors. But correlation does not equal causation.
Until the report is published and specific details are confirmed, any connection between WLFI and ZachXBT’s investigation remains purely speculative.
Why Stablecoin Confidence Matters
Stablecoins are widely used in crypto trading and decentralized finance. Traders rely on them as a digital substitute for dollars, especially when moving quickly between assets.
Because stablecoins aim to maintain a fixed value, trust is everything. If users believe reserves are insufficient or redemption mechanisms are broken, even a small price deviation can spark panic selling.
USD1’s structure differs from failed algorithmic models like TerraUSD. WLFI says USD1 is backed 1:1 by dollar reserves and US Treasuries, and the rapid recovery appears consistent with that claim.
Still, newer stablecoins, particularly those tied to high-profile political families, face heightened scrutiny. Public figures attract attention, and attention amplifies volatility.
Truth vs Rumor: What Is Confirmed
Confirmed facts:
* USD1 briefly dipped below $1 on February 23 before quickly recovering.
* WLFI attributed the volatility to a coordinated attack involving compromised social accounts and short positions.
* ZachXBT announced an upcoming report on insider trading at an unnamed crypto firm.
* Eric Trump publicly reaffirmed support for USD1 following the incident.
Unverified claims:
* That Eric Trump deleted older promotional posts because of the depeg.
* That WLFI is the target of ZachXBT’s forthcoming investigation.
* That the depeg reflects deeper solvency or reserve issues.
So far, there is no confirmed evidence linking WLFI to insider trading allegations, nor proof that social media activity was connected to market movements.
What to Watch Next
The coming days may clarify whether this episode remains a short-lived market shock or evolves into a broader credibility test.
If ZachXBT’s Feb. 26 report names another firm entirely, speculation around WLFI could quickly fade. If new evidence emerges tying the project to misconduct, scrutiny would intensify.
For now, USD1 is trading near parity with the dollar, and WLFI maintains that its reserves and infrastructure remain secure.
In crypto, markets often move faster than facts. Until verified information is available, distinguishing between confirmed developments and social media-driven rumor is essential, especially when politics, high-profile names and billions in digital assets intersect.
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