Lawyer John Deaton has filed a class action lawsuit against William Sarris, founder and former CEO of Linqto, alleging fraud in the sale of unlicensed shares.
Overview of the Lawsuit
The lawsuit, filed on July 9, claims that Sarris used unlawful methods to sell shares of cryptocurrency companies, including Ripple, Uphold, and Kraken. It states that he misled customers with false information and unfair pricing.
Legal Violations and Consumer Protection
The lawsuit alleges that Linqto charged investors 60% above the actual price and misused legal exemptions to avoid transparency. The sales methods violated investor protection laws by not providing proper disclosure, misleading thousands of users. Deaton seeks maximum recovery for affected Linqto users while preventing settlements that reduce compensation.
Future of Linqto
Linqto attorney Samuel A. Schwartz stated that the company plans to use the bankruptcy process to raise funds to repay creditors. Linqto will likely negotiate a payout plan with regulators before presenting a proposal to creditors. Given its cash generation issues since the suspension in March, Linqto is attempting to manage its debts through loans, with $60 million lined up from Sandton Capital Partners for financing bankruptcy.
Deaton's lawsuit against William Sarris serves as a significant precedent in the cryptocurrency investment landscape and consumer protection. The future of Linqto remains uncertain amidst current financial struggles.
