Bankrupt and Bewildered: Linqto’s Ripple Fiasco 🤯

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In the grand tradition of financial wizardry, Linqto, a private investment platform, has conjured up a Chapter 11 bankruptcy filing. It appears their magic trick of buying 4.7 million Ripple shares on the private market has not quite paid off. ✨

The US District Court for the Southern District of Texas received Linqto’s bankruptcy filing on Monday, no doubt a thrilling start to the week for all involved. 📝

This development comes hot on the heels of Ripple CEO Brad Garlinghouse’s clarification that Linqto owns 4.7 million secondary Ripple shares but has no business relationship with the company. One can almost hear the sound of Ripple frantically distancing itself from Linqto, like a celebrity disavowing a embarrassing relative. 🙅‍♂️

Garlinghouse took to X to proclaim, “Apart from Linqto being a shareholder, Ripple has never had a business relationship with Linqto, nor have they participated in our financing rounds.” Ah, the classic “we’re just acquaintances, not friends” defense. 🤷‍♂️

The Mysterious Case of the Shares’ Value

A Linqto spokesperson, no doubt a master of evasion, declined to provide information on when the company purchased Ripple shares on the secondary market. It seems Linqto is playing a game of hide-and-seek with the truth. 🎭

However, data from the private market platform Forge suggests that Linqto’s Ripple share holdings might be worth around $450 million at the secondary market share price of $95.5. Though, a court filing on Tuesday stated that Linqto’s private-securities offering vehicle, Liquidshares, holds securities with an “estimated fair market value in excess of $500 million” in 111 issuing companies. It’s all a bit of a financial puzzle, isn’t it? 🤔

The Linqto representative, still playing coy, did not clarify the value of the company’s Ripple share holdings to CryptoMoon. Ripple, wisely, chose not to comment, no doubt thinking, “We’re good, we’re out of this mess.” 🙅‍♂️

The Plot Thickens: Federal Investigation Reports

Last Monday, The Wall Street Journal reported that Linqto faced federal investigations and a possible bankruptcy filing. It seems the company’s troubles have been brewing for a while, like a toxic potion. ⚗️

The report alleged that an internal investigation discovered evidence that “Linqto customers never owned the securities they thought they did.” Oh dear, it appears Linqto has been playing a game of financial smoke and mirrors. 🔮

Linqto’s new CEO Dan Siciliano reportedly said, “Much of what we discovered about the prior business practices at Linqto is disturbing.” One can only imagine the look on his face when he stumbled upon the company’s financial wizardry. 😱

Former CEO William Sarris, it seems, tried to offer Ripple shares to Linqto’s 11,000 users at a price at least 60% higher than what it paid, violating the prohibition on markups above 10% by the US Securities and Exchange Commission (SEC). Ah, the classic “let’s make a quick buck” strategy. 💸

The First Day Hearing: A Spectacle to Behold

Linqto’s first bankruptcy hearing is scheduled for Tuesday at 9:00 pm UTC, featuring a star-studded cast, including chief restructuring officer Jeffrey Stein, Kate Mailloux from Epiq Corporate Restructuring, and Ryan Hamilton, senior vice president for debt advisory and restructuring at Jefferies. It’s going to be a financial circus, folks! 🎪

A Tuesday court filing detailed that Linqto specifically failed to comply with securities laws by improperly structuring its series limited liability companies and lacked transfer permission from issuers like Ripple. It’s a financial mess, if you will. 🌪️

Linqto shuttered its platform on March 13, effectively ending its revenue operations. The SEC has since notified the firm of an ongoing investigation into potential violations by Linqto and its affiliates, according to court filings. It’s a financial thriller, if you will. 📚

Ripple’s Distance: A Wise Move

Ripple reportedly stopped approving Linqto purchases of its secondary shares in late 2024, according to Garlinghouse. Ah, a wise decision, indeed. 👏

Linqto’s former chief revenue officer, Gene Zawrotny, also filed a lawsuit against Linqto and key former executives Bill Sarris and Joe Endoso, alleging serious compliance failures and retaliation. It’s a financial soap opera, folks! 📺

The news comes the next day after Linqto denied allegations of changes to Liquidshares’ holdings of Ripple in response to an X post by CapSign CEO Matt Rosendin. “Contrary to published reports on X, Linqto confirms that Liquidshares’ holdings of Ripple shares remain unchanged, and as confirmed by Ripple last week, Linqto continues to own 4.7 million shares,” Linqto stated. Ah, a classic case of “he said, she said.” 🤷‍♂️

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2025-07-08 17:11