Linqto, a private investment platform, has filed for Chapter 11 bankruptcy amid federal investigations into its practices regarding share sales.
Linqto's Bankruptcy Filing
Linqto, a Ripple shareholder, filed for Chapter 11 bankruptcy following months of investigations by federal authorities regarding Ripple share sales. The company held 4.7 million shares of Ripple acquired on the secondary market.
Leadership Changes and Regulatory Approach
Linqto's bankruptcy raises concerns regarding trust in retail access to pre-IPO shares. 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."
Risks for Retail Investors
Linqto's situation could signal shifts in pre-IPO equity markets, particularly for retail investment platforms. Ripple CEO Brad Garlinghouse clarified that there is no business relationship between Ripple and Linqto and that Ripple did not directly sell shares to Linqto. Regulatory scrutiny underlines risks for investors in the pre-IPO market. Historical patterns suggest intensified regulatory efforts in similar situations.
The situation surrounding Linqto raises questions about the future of retail investment platforms and warns investors of potential risks associated with accessing pre-IPO shares.
