The U.S.-based investment platform Linqto, a shareholder in the crypto firm Ripple, has filed for bankruptcy following a series of legal issues and government investigations.
Bankruptcy Announcement
Linqto, which enabled retail investors to purchase shares in pre-IPO companies, filed for Chapter 11 bankruptcy in the U.S. District Court for the Southern District of Texas. Court documents reveal that the firm’s investment vehicle, LiquidShares, holds securities valued at over $500 million, including 4.7 million shares of Ripple.
Ripple's Connection to Linqto
Ripple CEO Brad Garlinghouse stated that there is no business relationship between Ripple and Linqto, despite the latter being a shareholder. He emphasized that Linqto never participated in any of Ripple's financing rounds.
Legal Issues and Investigations
Linqto faces increasing scrutiny from U.S. regulators. According to The Wall Street Journal, internal reviews raised alarms that Linqto improperly marketed private equity investments to ineligible retail investors and exceeded the allowed markup levels on Ripple shares.
Linqto's difficulties raise questions about governance standards in the private investment sector. The company's bankruptcy may affect investors' trust in similar platforms.
