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Linqto, a once prominent private investment platform that promises that everyday investors access to technology giants before IPO, has applied for bankruptcy in Chapter 11 as a worrying revelation: Customers may have never owned shares they believe they are buying.
Source: Epiq
FINTECH a company based in San Jose submitted their bankruptcy submission On Monday in the Southern Texas district on Monday, it is estimated to be a list of assets between $ 500 and $ 1 billion. The company also revealed that more than 10,000 creditors could be affected.
The heart of fallouts is widely on the LINQTO market for private events in high -ranking companies such as Ripple and Coreweave.
On Tuesday, however, on Tuesday, it depicts a grim image and claims that “years of bad proceedings” have left the company possible insolvent and that previous managers “consciously failed to cure extensive and serious violations of the Securities Act, which began in 2020”, according to the main restructuring officer Jeffrey Stein.
LINQTO, Inc. Files Chapter 11 Bankerptcy
Alert of bankruptcy
Linqto, inc.
Chapter 11 – Southern District of Texas
File: July 7, 2025
Case 25-90187
Assets: 500 million- $ 1b | Liabilities: 500 million- $ 1b | Total creditors: 10,001-25 000 | Industry: Professional,… pic.twitter.com/yauqtrpzqa
– RK | Consultants (@_rkonsultants) 8 July 2025
SEC examines LINQTO over the misleading retail sale of “units” of Ripple
The most popular LINQTO offers were secondary market shares in Ripple Labs. The company claims that it has through its LINQTO LIQUIDSHARES investment vehicle, which could have $ 450 million at the current secondary prices. However, questions about real ownership have raised an alarm.
In particular, Tuesday’s bankruptcy has revealed that LINQTO structured its offers through serial limited liability companies, which is a setting that lacked the necessary permits to transfer from issuers such as Ripple.
In addition, Ripple Brad CEO took the Garlinghouse last week to distance the crypto company from Linqto, which explained that while Linqo owns, he never had a business relationship with Ripple.
“In addition to the fact that Linqto was a shareholder, Ripple never had a business relationship with LinQto, nor did it participate in our financial rounds,” Garlinghouse wrote. He added that Ripple ceased to approve LINQTO purchases at the end of 2024, as concern.
With the curiosity of investors from confusion, the US Securities and Stock Exchange Commission started investigation Whether LinQto allowed incomprehensible investors to buy securities and whether its former management was mistaken for customers to think that their own actual shares, rather than indirect “representative units” with unclear legal status.
The illusion of ownership is in the middle of the controversy. According to an internal investigation initiated by the new CEO Dan Siciliano, the previous management LINQTO reported investments in a way that could distort what customers actually buy.
“Much of what we have discovered about previous trading practices in LinQto is worrying,” Siciliano told employees. “These practices are not a small one -time compliance with regulations or common regulatory incorrect steps.”
Linqto collapse shakes faith in retail access to private capital
The Linqo Fall was first indicated on June 30 when The Wall Street Journal reported The company faced federal probes and possible bankruptcy.
The output quoted internal notes that indicate that customers have never owned securities they believed they had purchased.
Another inspection fell on the former company management. Former General Director William Sarris supposedly He tried to offer Ripple shares to 11,000 LINQTO users at a brand exceeding 60%, which violates the SEC rules that reduce such an increase to 10%.
Although Sarris resigned, he is still sitting on the company’s council. The former main income officer Gene Zawrotny has already left the company and later filed a lawsuit with serious failure and retaliation of compliance.
Now he is trying to restructure under LINQTO bankruptcy. He found a restructuring expert Jeffrey Stein to lead and preserve several companies, including Triple P TRS, LLC and EPIQ restructuring of enterprises, for legal and administrative support.
The aim of the company is to negotiate with SEC and other regulatory authorities to settle unpaid obligations and litigation in a way that “treats all fairly and fairly”, according to Stein’s statement.
Returning to profitable investment via LINQTO can let the investor’s profits, a lawyer, a lawyer @Johnedeaton1 warns.#Inqto #Ringhttps://t.co/5cageBo0sk
– Cryptonews.com (@cryptonews) June 30, 2025
However, wider damage is already in the course of the alternative investment sector. Linqto’s promise, a democratizing approach to the private market, appealed to thousands of retail investors who wanted to get to the unicorn startup soon.
But The platform closed 13th March cut off all the flows of income. Now many of these investors are faced with knowing that shares they thought they had owned could only be a little more than the promise that disappeared to an bankruptcy court.
As Garlinghouse pointed out: “I have no idea how LinQto managed participants selling” representative units “of Ripple shares … I can’t provide any assurance on business practices LINQTO or how they can do it now.”
He added, however, that the basic value of Ripple shares has increased and “these shares should be significant profits for” linqo shareholders “. ”
Whether these shareholders ever see these profits or any restitution at all depend on what is happening in the bankruptcy court.
The first LINQTO hearing is scheduled for Tuesday, where the extent of damage and prospects for recovery can finally begin to form.
Contribution “You’ve never owned shares”: Bankruptcy LINQTO reveals an illusion before IPO He appeared for the first time Cryptonews.
