Crypto company MoonPay borrowed $160 million from Ripple and Galaxy Digital to support the launch of the TRUMP meme coin. MoonPay's CEO Ivan Soto-Wright even pledged his entire net worth for these loans.
MoonPay's Critical Situation
MoonPay's president Keith Grossman explained on the 'When Shift Happens' podcast that the company faced difficulty accessing reserves held with BlackRock over a holiday weekend. The TRUMP token's sudden popularity drained their liquidity, as new users flocked to their Moonshot trading app.
Loan Acquisition Process
Initially, Grossman and Soto-Wright estimated a loan need of about $50 million, but revised this to $100 million anticipating further demand. They first approached Galaxy Digital's CEO, Mike Novogratz, and after discussions and confirmations with BlackRock, secured the needed funds. Continued demand prompted an additional $60 million loan from Ripple Labs.
Sharp Decline of TRUMP Token
The TRUMP token exhibited unexpected trading volumes initially but has since declined almost 80%, currently trading at $15.37. During this time, MoonPay managed to repay its loans from Ripple and Galaxy Digital on time.
Despite initial challenges and the need to secure significant loans, MoonPay effectively managed the situation and repaid its debts. The TRUMP token event highlighted the importance of reserve access and market timing.
