Linqto, a private investment platform, has filed for Chapter 11 bankruptcy in the Southern District of Texas, listing assets and liabilities between $500 million and $1 billion. The filing follows ongoing federal investigations into alleged securities violations, including misleading retail investors about ownership of pre-IPO shares in companies like Ripple.
The company holds 4.7 million Ripple shares—valued between $450-$800 million—but court documents reveal customers purchased "representative units" rather than actual shares due to unauthorized structures lacking transfer permissions. Former CEO William Sarris faces scrutiny for selling Ripple shares at 60%+ markups, violating SEC's 10% limit, while Ripple CEO Brad Garlinghouse emphasized "no business relationship" with Linqto, noting Ripple halted share approvals in late 2024.
An SEC probe is examining whether Linqto misled over 10,000 creditors about share ownership and sold securities to ineligible investors. Interim head Jeffrey Stein aims to negotiate settlements with regulators, acknowledging "years of mismanagement" and potential insolvency. The collapse spotlights risks in private equity vehicles and may trigger broader regulatory tightening for crypto-adjacent SPVs.
