Ripple Distances Itself as Linqto Faces Bankruptcy and SEC Probe

Linqto, an investment platform known for offering shares of private companies like Ripple, is reportedly facing bankruptcy and is under investigation by both the U.S. Securities and Exchange Commission (SEC) and the Justice Department over its sales practices. This development has raised concerns among Ripple investors and supporters, who fear that their Ripple shares, bought through Linqto, might be at risk.

In response to the growing concerns, Ripple’s CEO Brad Garlinghouse addressed the community through a social media post. He clarified that Linqto owns 4.7 million shares of Ripple, which were purchased solely on the secondary market from existing Ripple shareholders, and not directly from Ripple. Garlinghouse emphasized that Ripple has never had a business relationship with Linqto and that the company stopped approving secondary market purchases through Linqto in late 2024 due to growing concerns.

Garlinghouse also took the opportunity to explain the difference between XRP tokens and Ripple shares, stressing that the issue only involves Ripple shares held by Linqto, not the cryptocurrency itself. He stated that he has no knowledge of how Linqto managed its clients or sold ‘representative units’ of Ripple shares, but confirmed that Linqto owns those 4.7 million shares, and their value has increased over time.

While the future of Linqto remains uncertain, with talk of bankruptcy and ongoing federal investigations, Garlinghouse’s message offered some reassurance to Ripple investors. The company could be heading toward a possible restructuring, but Ripple continues to distance itself from the troubled investment firm, making it clear that its own operations and share value remain unaffected by Linqto’s legal and financial troubles.

The scandal has brought to light the complexities and risks associated with investing in private companies through cryptocurrency platforms. It has underscored the importance of transparency and accountability in the industry, as well as the need for robust regulatory frameworks to protect investors. The incident has also highlighted the interconnected nature of the cryptocurrency ecosystem, where the actions of one player can have ripple effects throughout the industry.

As the situation continues to evolve, Ripple and its leadership will need to navigate these challenges carefully to maintain investor confidence and ensure the company's long-term viability. The outcome of this scandal will likely have far-reaching implications for the future of cryptocurrency investments and the regulatory landscape in which they operate. It is crucial for all stakeholders to work together to address these issues and promote a more stable and secure environment for investors.