Linqto’s Ripple Shares at Stake as Chapter 11 Filing Reveals SEC Probe

- Ripple shareholder Linqto files for Chapter 11 bankruptcy in Texas. - Allegations include deceptive practices, securities law violations, and customer misrepresentation. On July 8, 2025, Cointelegraph reported that Linqto, a private investment platform holding 4.7 million secondary shares of Ripple, filed for Chapter 11 bankruptcy with the U.S. District Court for the Southern District of Texas. The filing follows months of scrutiny over allegations of securities law violations and deceptive practices that affected both customers and regulatory compliance. Ripple CEO Brad Garlinghouse clarified that Ripple maintains no direct business relationship with Linqto beyond its shareholder status. Meanwhile, an internal investigation at Linqto uncovered evidence that customers might not own the securities they thought they had acquired. Accusers also claim Linqto marketed its services to individuals who were potentially unqualified to invest in private companies. Linqto’s newly appointed CEO, Dan Siciliano, described prior business practices as “disturbing,” underscoring that the violations were more than minor errors. In addition, former CEO William Sarris faces accusations that he sold Ripple shares at a markup exceeding the SEC's 10% limit. The Chapter 11 filings detail Linqto’s regulatory missteps, which ranged from improperly structuring limited liability companies to failing to secure transfer permissions from issuers like Ripple. Consequently, Linqto ceased its operational activities and shut down its investment platform on March 13, 2025. The SEC has since launched an ongoing investigation into potential violations tied to these practices. The initial bankruptcy hearing occurred on the filing date, July 8, in the Southern District of Texas. Further proceedings are anticipated as federal investigations progress. As of 15:08 UTC on July 8, Ripple’s native cryptocurrency XRP was trading at $2.287, a 1.519% decrease over the past 24 hours. During the same period, its trading volume rose by 27.778%, according to CoinMarketCap.