Ripple CEO Denies Linqto Ties Amid Fraud Probe

Ripple CEO Denies Linqto Ties Amid Fraud Probe

Ripple CEO Brad Garlinghouse has publicly denied any business relationship with Linqto, a private stock investment platform under investigation by the US Securities and Exchange Commission (SEC) and the Department of Justice (DOJ).

The investigations center on alleged securities fraud and deceptive sales practices by Linqto. Garlinghouse's statement follows reports that Linqto may have misled thousands of retail investors and violated federal securities laws.

Key Takeaways

• Ripple has no direct business relationship with Linqto.
• Linqto purchased Ripple shares solely in the secondary market.
• Linqto faces investigations over undisclosed markups and improper share sales.
• Linqto investors are currently locked out of their accounts.

Linqto, a San Francisco-based fintech firm, facilitates the sale of shares in private companies. According to reports, former Linqto CEO William Sarris led a high-pressure sales campaign, "Spike Day," selling Ripple shares to retail investors at prices 60% higher than Linqto's purchase price, without disclosing the markup. Linqto reportedly earned $2 million from this campaign.

Garlinghouse clarified on X (formerly Twitter) that Linqto's 4.7 million Ripple shares were acquired solely through secondary market transactions from other Ripple shareholders, not directly from Ripple. He stated that beyond Linqto's status as a shareholder, there's been no business relationship between the two companies. Ripple reportedly stopped approving further Linqto secondary market purchases in late 2024 due to concerns about Linqto's practices.

Further allegations against Linqto include allowing non-accredited investors into restricted deals and marketing to users in sanctioned countries.

New Linqto management has acknowledged "serious securities law violations" and is preparing for potential bankruptcy restructuring. All Linqto investors, including those who purchased Ripple shares, are currently unable to access their holdings due to the ongoing investigations.

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