World Liberty Financial’s USD1 stablecoin has shed more than 400 million USD in market capitalization over the past two weeks, and on-chain researchers have traced nearly half of the outflows to a single unidentified wallet.
By Diego Rivera | October 19, 2026
CoinGecko data on Monday showed USD1’s market capitalization at roughly 4.02 billion USD, down from 4.43 billion USD on October 6 — a decline of approximately 401 million USD, or 9.1 percent. World Liberty Financial’s own proof-of-reserves dashboard separately reported about 4.01 billion USD in reserves, confirming that the supply contraction is real and not a data artifact.
The anatomy of the redemptions
Blockchain research firm Onchain Benchmark dug into the mechanics of the decline. Between October 6 and October 15, Ethereum accounted for 184.60 million USD in net USD1 redemptions across 63 token burns, while BNB Chain recorded 200.43 million USD across just 12 burns. On Ethereum, more than 99 percent of tokens sent for redemption passed through a wallet labeled BitGo, USD1’s current issuer and custodian.
The BNB Chain side of the story is more intriguing. Nearly 200 million USD of those redemptions originated from a single unidentified address, which moved funds in large batches of 30 million to 50 million USD at a time. Researchers could not establish who controls the wallet or why the funds were pulled.
A contraction, not a collapse
Despite the size of the redemptions, USD1 held its dollar peg throughout the entire period, trading between 0.998 and 1.000 USD. Onchain Benchmark found no evidence of a sustained depegging event, meaning the decline in circulating supply was not accompanied by any loss of confidence in the token’s dollar value. This was an orderly contraction — large holders cashing out — rather than a run on the bank.
Transfers between Ethereum and BNB Chain during the window totaled less than 1 million USD, ruling out the possibility that supply was simply shifted between the two networks. The tokens were genuinely redeemed and burned.
Steeper than the majors
Context makes the numbers more striking. Between October 6 and October 15, USD1’s supply on Ethereum contracted by 11.45 percent — a steeper decline than any of the major dollar stablecoins over the same period. USDe fell 4.93 percent, USDC declined 2.18 percent, and circulating USDT slipped just 0.76 percent.
Meanwhile, there was no offsetting new issuance elsewhere. USD1 supply on Solana remained unchanged at roughly 1.42 billion USD during the nine days reviewed. Whatever is driving the redemptions, fresh minting on other chains is not filling the gap.
The issuer question hanging over USD1
The timing matters because USD1 is preparing for a change of issuer. World Liberty Financial has been working to open its own trust company, which would take over issuance of the token from BitGo. Onchain Benchmark flagged this transition as the key risk event ahead.
“The next tests come with the change of issuer,” the researchers wrote. “When World Liberty’s trust company opens, it will take on a token whose size depends on the decisions of a few large holders, under a charter whose legal footing is being argued in court. Whether fresh mints on Solana, or anywhere else, rebuild the total, or October marks the size USD1 carries into its new issuer, is the question the next weeks of supply data will answer.”
What altcoin investors should watch
USD1 is one of the largest stablecoins in the world, and concentration risk is now visibly its defining characteristic. When a single anonymous wallet can move 200 million USD out of a 4 billion USD token in nine days, supply data becomes as important as price data. Holders and traders should watch three things: whether the peg holds through further large redemptions, whether the Solana supply starts growing to compensate, and how smoothly the issuer transition actually executes.
For now, the peg is intact and reserves match supply. But the era of stablecoins growing on autopilot appears to be over for USD1 — its next chapter will be decided by a handful of whales, a court, and a brand new trust charter.
9% of supply gone in two weeks and they still call it fine. that BNB Chain number, 200 million across a single chain, is the part that spooks me
One wallet responsible for nearly half the redemptions and the BNB side was basically a single 200 million burn. this is not a bank run, its one guy hitting the exit
A single wallet responsible for nearly half the redemptions changes the story completely. One whale rebalancing is not a bank run, but the headline sure wants it to be.
@Dana one whale maybe, but 63 separate burns on ethereum says more than one entity wanted out imo
one wallet being half your outflows is a concentration problem even if the peg holds. 4.02B still fine tho
4.43B to 4.02B and reserves still cover supply. if one whale is your entire bear case youre reaching a bit
never said it was a collapse. but a token whose size depends on two or three wallets is a different risk profile than they marketed, thats the point
At least the proof of reserves matches the supply drop. Half of these stablecoins would just quietly rebase and hope nobody checks.
9.1 percent off in two weeks with reserves matching at 4.01B. its fine until the next whale reads the same onchain benchmark report
63 separate burns on ethereum vs 1 giant one on BNB. someone was unwinding carefully and then just gave up lol
or one entity testing exit routes across two chains before picking the cheapest. 63 careful burns on ethereum, then a single 200 million one on BNB is the tell