TRUMP Memecoin Leads to MoonPay’s Financial Strain, Galaxy and Ripple Step In
The launch of the TRUMP memecoin has caused a frenzy in the crypto markets, to the point of putting MoonPay in financial difficulty. Faced with explosive demand, the exchange platform had to seek emergency financial assistance. Mike Novogratz, CEO of Galaxy Digital, and Brad Garlinghouse, CEO of Ripple, lent $160 million to MoonPay to help facilitate transactions.
Keth Grossman, President of MoonPay, revealed that over 750,000 new registrations were made in just one weekend, overwhelming the servers and causing congestion similar to a DDoS attack. With MoonPay’s funds temporarily held by BlackRock due to the extended presidential inauguration weekend, the company had to turn to influential figures in the crypto industry to keep its operations running.
The volumes were simply enormous. All the liquidity we used to buy and sell cryptocurrencies was locked in BlackRock accounts as part of traditional finance […], and it was Saturday, a holiday weekend during the inauguration. So, we didn’t have access to our capital. All the reserves we had were quickly depleting.
Novogratz provided $100 million, while Garlinghouse contributed $60 million. MoonPay was able to access its funds on Monday, January 21, and immediately repay the borrowed amounts.
A Memecoin at Its Peak… Before the Controversy
The enthusiasm for the TRUMP memecoin was remarkable. In just 24 hours, its market capitalization reached nearly $9 billion, resulting in a diluted valuation of $72 billion. This ascent reflects the growing appeal of memecoins inspired by public and political figures.
However, this surge also brought about strong criticism, particularly regarding the legitimacy of a U.S. president (former or current) profiting from a crypto asset. Several analysts and politicians have denounced a potential conflict of interest and legal risks associated with this initiative.
Accusations of Constitutional Violation
The political dimension of the TRUMP memecoin quickly caught the attention of U.S. lawmakers. Lawyer David Lesperence believes that this initiative may violate the emoluments clause of the U.S. Constitution, which prohibits a president from accepting payments or gifts that may influence their decisions.
Senator Elizabeth Warren reacted by calling for an immediate investigation into the project, highlighting in a letter dated January 22nd that 80% of TRUMP tokens are held by the Trump Organization and its affiliates. This situation, according to her, could open the door to questionable practices or even a disguised system of corruption through the blockchain.
