Cypto payments company MoonPay borrowed $160 million from Ripple and Galaxy Digital to support President Donald Trump’s TRUMP meme coin release.
MoonPay CEO Ivan Soto-Wright had even to pledge his entire net worth to access the loans.
MoonPay could not access its reserves in Blackrock accounts
MoonPay’s President Keith Grossman, on the ‘When Shift Happens’ podcast, described the company’s situation over the holiday weekend and why they had to borrow millions of dollars in USDC over Trump’s meme token.
Grossman explained that the TRUMP meme coin was surging quickly, eating through the company’s available funds, especially with new users jumping on their Moonshot trading app.
However, all the liquidity they used to transfer crypto was locked in BlackRock accounts in a traditional finance manner. Given that it was on a Saturday, they could not access their reserves, so they thought of asking for loans, knowing they could pay them back once they could access their accounts.
Grossman, Wright, and MoonPay’s CFO, Mouna Siala, first projected they would need about $50 million in loans; however, they raised their estimate to about $100 million after reassessing the meme coin’s surge.
Grossman first contacted Galaxy Digital’s CEO, Mike Novogratz, to request a loan. After reaching an agreement, the firm swiftly gathered the necessary paperwork and even had to confirm, through a connection at BlackRock, whether they had sufficient reserves to repay the loan.
However, as the TRUMP token kept surging, the initial $100 million fell short, prompting MoonPay to seek additional funding from Ripple Labs.
“We underestimated the demand of this Trump token,” Grossman quoted the words they told Ripple’s CEO Brad Garlinghouse.
In total, Moonpay acquired $160 million from both companies, with Ripple providing the extra $60 million. Grossman said that Wright pledged his assets to acquire both loans and that the company had to guarantee that it had no liens on its reserve capital.
Nonetheless, on Tuesday, January 21, MoonPay was able to pay back its loans in full.
The TRUMP token has fallen significantly from its peak trading days
In the first five days of its launch, the Trump token saw over $20 billion in trading volume and more than $70 billion in fully diluted valuation in less than 48 hours. It even acquired spot listings from major crypto exchanges like Coinbase and Binance.
However, the token has dipped by almost 80% from its peak, trading at only $15.37. The token currently has a $3.07 billion market cap and a trading volume of $830,169,796.MoonPay stated it had to ask for loans from Galaxy Digital and Ripple, to facilitate TRUMP meme coin purchase
The Melania token, launched just a few hours after the TRUMP token, is trading at only $1.39, having fallen by more than 40% in the last two weeks
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