Linqto is a private investment platform that sells access to the crypto payment firm’s equity through secondary markets.
According to him:
“What we know from our records is Linqto owns 4.7M shares of Ripple, solely purchased on the secondary market from other Ripple shareholders (never directly from Ripple).”
Garlinghouse also noted that Ripple stopped approving Linqto-related secondary transactions in late 2024 due to growing concerns about the platform’s practices.
Schwartz said:
“The way it works is that you don’t own the shares directly but you own a portion of a legal entity that owns the shares. So if you “bought” Z shares, you own X fraction of a legal entity with Y shares where X*Y=100.”
The controversy surrounding Linqto comes as the Securities and Exchange Commission (SEC) and the US Department of Justice (DOJ) investigate Linqto for potential securities law violations.
According to reports, former Linqto CEO William Sarris is under scrutiny for allegedly inflating Ripple share prices by over 60% and selling them without proper authorization.
Deaton claimed that approximately 11,500 Linqto users had bought SPV units, assuming they were purchasing actual Ripple shares. Of those, about 5,000 are non-accredited investors, heightening concerns about compliance with SEC regulations.
He wrote:
“These are not Ripple shares per se (like many people believed, assumed, or allegedly, were led to believe) but shares/units of a SPV(s) that owned the Ripple shares. I’ve been told 4-5,000 of those SPV Ripple investors are non-accredited, which makes this a regulatory compliance nightmare.”
