Investment Platform Collapse Follows Regulatory Scrutiny

Private investment firm Linqto, known for holding 【4.7 million shares】 of Ripple Labs, has officially filed for Chapter 11 bankruptcy protection in Texas federal court. The July 8 filing comes after months of mounting regulatory pressure and internal investigations into alleged securities violations.

Ripple Distances Itself From Troubled Shareholder

Ripple CEO Brad Garlinghouse publicly clarified last week that while Linqto holds secondary market shares, the blockchain company "never had a business relationship" with the investment platform. Court documents reveal Ripple stopped approving Linqto's share purchases in late 2024 following a FINRA review of Linqto's broker-dealer arm.

——"These shares were acquired on secondary markets without Ripple's participation," Garlinghouse emphasized in a social media post——

$500M Portfolio Faces Uncertain Future

Linqto's bankruptcy filing discloses its Liquidshares vehicle holds private securities valued over 【$500 million】 across 111 companies, including the Ripple position. While secondary market data suggested a $95.50 per share valuation for Ripple stock, industry experts note all trading has paused during Ripple's ongoing $700 million tender offer.

EquityZen co-founder Phil Haslett told Cointelegraph: "Pre-tender prices fluctuated between $70-$75 per share, but current valuations remain speculative given the market freeze."

SEC Investigation Compounds Operational Crisis

The bankruptcy follows a Wall Street Journal report detailing federal probes into Linqto's business practices. Internal documents allegedly revealed: • Customers may not have actually owned the securities they purchased • Marketing targeted potentially ineligible investors • Former leadership attempted to markup Ripple shares 【60% above】 acquisition cost

New CEO Dan Siciliano described the findings as "disturbing" regulatory violations rather than minor compliance issues.

First Hearing Scheduled Amidst Legal Storm

The Southern District of Texas will hold Linqto's first bankruptcy hearing on July 9, with testimony expected from restructuring specialists and financial advisors. Court filings indicate the SEC has already notified Linqto of an active investigation into securities law violations.

Notably, the platform ceased operations on March 13 after failing to obtain proper transfer permissions from issuers like Ripple. This operational shutdown eliminated Linqto's revenue streams months before the bankruptcy filing.

Secondary Market Fallout Continues

The case highlights growing regulatory scrutiny of private securities marketplaces. As Linqto's assets face court-supervised valuation, industry observers warn the bankruptcy could trigger wider reassessment of pre-IPO investment risks—particularly for crypto-related holdings traded on secondary platforms.

——"This isn't just about one company's failure, but about systemic issues in private share trading," commented a restructuring expert familiar with the case——