Linqto, once hailed for democratizing pre-IPO investments in Ripple, faces a crisis amid federal investigations, potential bankruptcy, and a disgruntled customer base of around 13,000. The SEC and DOJ are probing allegations against former CEO William Sarris for inflating Ripple share prices by over 60%, unauthorized stock sales, and promoting deals to unqualified investors. New management has frozen client accounts since February and warned that a Chapter 11 filing could leave many investors as unsecured creditors. A recent press release acknowledged significant securities-law violations and the suspension of trading, while nearly half the staff has been laid off. Attorney John E. Deaton highlighted that many investors unknowingly bought into special-purpose vehicles (SPVs) that do not directly own Ripple shares, complicating their legal standing. Ripple's CTO, David Schwartz, clarified that investors own a fraction of a legal entity holding shares, not the shares themselves. The situation raises concerns about the operational risks tied to SPVs and the potential for prolonged legal disputes. Read more AI-generated news on: https://app.chaingpt.org/news

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