- Main event involves Linqto’s bankruptcy, regulatory scrutiny, and leadership changes.
- 4.7 million Ripple shares are implicated.
- The retail investor market faces potential risks and shifts.
Linqto, a shareholder in Ripple, filed for Chapter 11 bankruptcy following federal investigations into its securities practices.
Linqto’s bankruptcy filing highlights risks in retail access to pre-IPO shares, impacting market trust.
Linqto, a private investment platform, has encountered regulatory challenges leading to its Chapter 11 bankruptcy filing. Months of investigations by federal authorities scrutinizing Ripple share sales have intensified its troubles. Linqto held 4.7 million Ripple shares, acquired on the secondary market.
The company attempted to sell Ripple shares at markups reportedly violating SEC guidelines. Former CEO Will Sarris oversaw these operations, while the restructuring will be led by Jeffrey Stein, who aims to settle liabilities with regulators. As Jeffrey Stein stated, “The company aims to negotiate with the SEC and other regulators to settle outstanding liabilities and litigations in a way that treats everyone equitably and fairly.”
Linqto’s situation could signal a shift in pre-IPO equity markets, particularly retail investment platforms. Ripple CEO Brad Garlinghouse clarified there is no business relationship between Ripple and Linqto, emphasizing that Ripple did not directly sell shares to Linqto.
Regulatory scrutiny underlines risks for investors in the pre-IPO market. Despite the focus on Ripple’s shares, major cryptocurrencies like XRP remain unaffected, with no significant on-chain impacts reported. Investors express concerns about the authenticity and security of their holdings.
Historical patterns suggest intensified regulatory efforts in similar situations, particularly emphasizing compliance and the protection of unqualified investors. Such issues were prevalent during the ICO regulatory actions and OTC desk failures in past years, reiterating the complexity of retail access to emerging fintech offerings.
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