Ripple Shares Safe Despite Linqto Bankruptcy Woes, Confirms John Deaton

Ripple Shares Safe Amid Linqto bankruptcy

Linqto's Troubles and Investor Exposure
1. Ripple's Stance and Deaton's Reassurance

Amidst the unfolding bankruptcy and federal investigations surrounding Linqto, an investment platform that offered pre-IPO shares, reassuring clarity has emerged for those holding purported Ripple (XRP) shares through the firm. Prominent pro-XRP attorney John Deaton has asserted that legitimate Ripple shares held via Linqto's structure are fundamentally safe from the platform's financial collapse, although investors face a complex recovery process due to Linqto's alleged misconduct.

Linqto's Troubles and Investor Exposure

Linqto, which had enabled thousands of investors to gain exposure to private companies like Ripple, is now under intense scrutiny from the SEC and Department of Justice. The firm is accused of pervasive securities law violations, including drastically marking up Ripple share prices, selling shares without proper consent, and unlawfully soliciting non-accredited investors. These alleged practices have led to frozen accounts for approximately 13,000 customers and a potential Chapter 11 bankruptcy filing, leaving many concerned about the fate of their investments. It's crucial to understand that most investors held units in Special Purpose Vehicles (SPVs) linked to Ripple shares, rather than directly owning Ripple stock.

Ripple's Stance and Deaton's Reassurance

Ripple CEO Brad Garlinghouse has unequivocally clarified that Ripple Labs is not implicated in Linqto's alleged wrongdoings. Ripple never sold shares directly to Linqto and had no formal business relationship with the platform. Linqto's 4.7 million Ripple shares were acquired solely on secondary markets, and Ripple ceased approving further secondary purchases by Linqto in late 2024 due to "growing skepticism."

John Deaton, a Linqto investor himself, echoes this sentiment, stating that the underlying Ripple shares held within the SPVs should technically be "bankruptcy remote" from Linqto's debts. However, he acknowledges that the situation is a "regulatory compliance nightmare," particularly due to the involvement of thousands of non-accredited investors. Despite the complexities and the potential for a lengthy legal process, Deaton maintains a cautiously optimistic outlook that these investors will eventually recover their assets, pushing for regulatory action to expedite the process.

Disclaimer: The views and opinions expressed in this article are for informational purposes only and do not constitute financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

XRP Ripple SEC Brad Garlinghouse Securities Fraud non-accredited investors John Deaton DOJ Bankruptcy Linqto Ripple Shares Special Purpose Vehicles SPV

Ripple Shares Safe Despite Linqto Bankruptcy Woes, Confirms John Deaton

Sujit Kumar

Sujit received his Bachelors in Science from the LNMU Darbhanga. He is currently working as a Content Strategist. He has more than three years of professional experience in information systems, security policies, technologies, and Cryptocurrency. He has published 6 books in the area of information security and assurance. He has published more than 50 research articles in leading journals Regarding the Latest and Breaking Crypto News and updates. His research interests include access control, computer forensics, Digital Marketing, Web development, business hacks, player experience, and virtual storytelling.