TLDR
Ripple CEO Brad Garlinghouse clarifies that Linqto purchased shares from existing Ripple shareholders, not directly from Ripple.
Linqto faces potential bankruptcy and investigations by the U.S. DoJ, raising doubts about the status of 13,000 investors’ holdings.
Ripple assures investors that shares’ value has increased, but it cannot control Linqto’s financial struggles or operations.
Ripple CTO David Schwartz highlights that Linqto investors hold shares indirectly through legal entities, not directly in Ripple.
Brad Garlinghouse, CEO of Ripple, recently addressed the confusion surrounding Linqto’s ownership of 4.7 million shares of Ripple. The clarification comes as Linqto, an investment platform, faces increasing scrutiny from federal authorities. Investors have expressed concern over the status of their equity in Ripple, and Garlinghouse sought to clarify Ripple’s position in the matter.
Linqto’s Role in the Secondary Market
Brad Garlinghouse made it clear that Linqto acquired its 4.7 million shares through the secondary market, purchasing from existing Ripple shareholders. He emphasized that Ripple itself did not sell any shares directly to Linqto. The company does not have any formal business relationship with Linqto.
In a post on the social platform X, Garlinghouse explained that Ripple had stopped approving further purchases through Linqto in late 2024. This decision was made due to growing skepticism and concerns regarding the platform’s operations.
Linqto, which was once seen as a platform providing retail investors access to pre-IPO Ripple shares, has been facing mounting challenges. It now finds itself in a difficult position, facing a potential bankruptcy and investigations by the U.S. Department of Justice (DoJ). These issues have raised questions about how Linqto managed its investors and their investments.
Investor Confusion and Legal Concerns
Ripple’s CTO, David Schwartz, also addressed the situation, attempting to clear up any confusion among investors. Schwartz clarified that investors who had purchased shares through Linqto did not own the Ripple shares directly.
Instead, they owned a portion of a legal entity that holds those shares. This distinction is crucial as it impacts how investors view their ownership and what rights they may have in the event of further legal actions or changes to the platform’s structure.
The situation has created significant confusion among investors. Many had believed they were directly purchasing shares of Ripple, but the reality is more complex. As a result, some are left uncertain about the future of their investments and whether they will benefit from any potential gains in Ripple’s value. This uncertainty comes as Ripple continues to navigate its ongoing legal battles with the SEC.
Linqto’s Financial Troubles and Ripple’s Response
Linqto’s financial struggles are another concern. According to reports, the platform faces a potential bankruptcy with a user base of around 13,000. Attorney John E. Deaton revealed that many of the 11,500 users who invested through Linqto had done so via Special Purpose Vehicles (SPVs) designed to hold Ripple shares. There is also concern about the large number of non-accredited investors involved in these transactions, with some estimates suggesting that up to 5,000 of them could be non-accredited.
Despite these challenges, Garlinghouse reassured investors that the value of Ripple shares had increased over time. This rise in value could mean that those who hold units representing shares in Ripple may still see substantial gains. However, Garlinghouse made it clear that Ripple cannot control or manage Linqto’s practices and is not involved in any way with the platform’s financial difficulties.
Future Uncertainty for Linqto Investors
As Linqto faces growing legal and financial issues, it remains unclear how the platform will handle the investments made by its users. The ongoing investigations by the DoJ and the possibility of bankruptcy only add to the uncertainty for those who purchased shares through Linqto. Investors are left to wonder about the future of their investments and whether they will see the returns they expected.
Ripple, on the other hand, continues to focus on its own operations and expanding its market presence. As the company emerges from its legal battles with the SEC, Garlinghouse and Schwartz are working to ensure that Ripple’s future remains stable. While the situation with Linqto remains unresolved, Ripple’s leadership appears committed to moving forward and growing the business, despite the challenges posed by external factors.
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