WLFI's FUD drama, stemming from the bear market's sensitive nerves

Written by: Eric, Foresight News

On the evening of February 23rd Beijing time, Eric Trump, the second son of U.S. President Trump and co-founder of World Liberty Financial (WLFI), reposted a tweet about Binance listing more USD1 trading pairs. However, shortly after, Eric Trump deleted the tweet.

Amid the bearish market sentiment, speculation about this simple action was amplified endlessly. The USD1 to USDT exchange rate on Binance temporarily decoupled to 0.9802, and WLFI’s price also dropped nearly 10% briefly. As of press time, the prices of USD1 and WLFI have returned to normal fluctuations.

With the price decline, a lot of FUD (Fear, Uncertainty, Doubt) surfaced on X, such as Eric Trump deleting all crypto-related tweets, and rumors of internal issues within the Trump family.

Soon after, WLFI issued a clarification, stating that World Liberty Financial was targeted by a coordinated attack. Hackers infiltrated the accounts of several WLFI co-founders, bought off KOLs to spread panic, and heavily shorted WLFI, aiming to profit from the chaos artificially created. Later, WLFI’s official account posted again to clarify that WLFI and USD1 contracts were not compromised, only the X account was hacked, and USD1 still has sufficient funds backing it.

Is that really the case?

After this “deletion-triggered bloodshed,” some WLFI supporters or onlookers noted that they saw many posts on X about Eric Trump deleting all crypto-related tweets. However, in reality, Eric only canceled the retweets of WLFI’s official announcement that more USD1 trading pairs would be listed on Binance, and did not delete tweets in bulk.

Many users joked that the industry is now on the verge of being discredited; any small movement could trigger unexpected results, and everyone’s nerves are very tense. As WLFI is a crypto project endorsed by the U.S. President’s family, if even they give up, it might mean crypto truly has no hope.

Although the WLFI incident itself didn’t cause major impact, it raised many doubts. The most immediate concern was about the true internal situation of WLFI.

Just before this “attack” began, well-known on-chain detective ZachXBT posted a brief tweet warning that he would release a major investigation on February 26 into one of the most profitable companies in the crypto space. The investigation revealed that several employees had long been abusing internal data for insider trading.

Given the timing, many naturally linked ZachXBT’s disclosure with Eric Trump’s tweet deletion, suspecting WLFI was deleting evidence in advance. However, data from Polymarket showed that most people did not believe WLFI was the target of the upcoming exposé.

Some also argued that WLFI’s quick denial was due to the negative consequences caused by Eric Trump’s tweet deletion, and they wanted to shift blame onto “non-existent hackers” to calm public anger. The most straightforward reason is that if hackers really had “infiltrated” multiple WLFI co-founders’ X accounts, simply deleting retweets would be highly unreasonable.

Furthermore, WLFI’s claim of “mass shorting WLFI” has also been questioned. Currently, there’s no data indicating anyone shorted WLFI tokens in advance; at the time of the incident, only small amounts of USD1 were sold on-chain. The idea that someone preemptively shorted WLFI might be entirely unfounded. Considering these facts, some conspiracy theories suggest WLFI’s denial is an attempt to cover up other truths, such as deleting evidence related to ZachXBT’s exposé.

From a completely neutral perspective, this incident seems more like a manifestation of the current mutual distrust within the crypto community.

Before the Lunar New Year, Binance launched a highly profitable USD1 wealth management program, which not only pushed USD1’s issuance to second only to USDT and USDC but also provided substantial liquidity for USD1 and other tokens’ trading. However, this money-printing activity also planted a seed of suspicion in many users’ minds: could such large-scale subsidies be a bad omen?

Perhaps Eric Trump simply clicked the wrong button and canceled a retweet, but the crypto community filled in countless conspiracy theories, attributing “hidden motives” behind his actions. Retail investors in crypto have already been battered—once bitten, twice shy. If not for the current market environment, the flawed official denials like WLFI’s might never have gained traction.