The Role of Galaxy and Ripple in MoonPay’s Response to TRUMP Memecoin Launch
In a recent podcast, it was revealed that loans from Galaxy and Ripple were instrumental in enabling the crypto exchange MoonPay to manage the overwhelming demand following the launch of Donald Trump’s official memecoin on January 18. This unexpected token issuance marked a historic moment as it made Trump the first sitting president to have a direct association with a memecoin.
The launch of the token was a significant event, causing its market capitalization to surge from nearly $200 million at the time of issuance to over $10 billion within just 48 hours. This remarkable growth led to numerous spot and futures listings across various exchanges, contributing to a staggering $20 billion in trading volume over the two-day period.
However, the token’s explosive demand coincided with a weekend, during which MoonPay’s fiat accounts were inaccessible due to the holiday. The following Monday was a public holiday in honor of the swearing-in ceremony, which meant that MoonPay could not readily access over $100 million in liquidity needed to satisfy the trading demands for the TRUMP token. As a result, securing a short-term loan became the only viable solution to ensure that operations continued smoothly.
MoonPay’s president, Keith Grossman, along with CEO Ivan Soto-Wright and CFO Mouna Siala, assessed the situation and determined that the company required approximately $100 million worth of USD Coin stablecoin to meet the immediate liquidity needs. This prompted Grossman to reach out to Mike Novogratz for a loan.
Once an agreement was reached, MoonPay quickly prepared the necessary documentation and conducted a verification process to ensure repayment capability, which included vetting with a BlackRock executive, where MoonPay’s reserve funds were held. Despite securing the initial funds, the demand for the TRUMP token continued to soar, further fueled by the launch of the first lady Melania Trump’s MELANIA tokens. This unexpected surge necessitated an additional $60 million in funds, as the initial loan proved inadequate to cover the liquidity requirements.
In response to this escalating demand, Grossman again connected with Ripple’s CEO Brad Garlinghouse, admitting that he had “underestimated the demand for this Trump token.” After a thorough vetting process, Ripple stepped in to provide the additional $60 million needed, which included a pledge from MoonPay’s Wright for his entire personal assets as collateral. Furthermore, MoonPay had to demonstrate that there were no liens against its reserve capital.
Ultimately, MoonPay managed to repay all loans in full by January 21, a Tuesday following the long holiday weekend, when the company could finally access its reserve funds. In the aftermath of this whirlwind event, MoonPay successfully onboarded 750,000 new users in just that week.
Despite the initial excitement surrounding the TRUMP token’s launch, it is worth noting that its price has since plummeted by 79% from its peak on January 19.
