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Highlights
- Ripple CEO Brad Garlinghouse distances himself from Linqto bankruptcy and the recent DoJ probe.
- Attorney John Deaton revealed that around 11,500 users invested through SPVs intended to hold Ripple equity.
- Ripple CTO David Schwartz also sided with Garlinghouse addressing shareholder confusion.
- Garlinghouse says he cannot provide any assurances on Linqto's business practices.
As investment firm Linqto faces a recent probe by the US Department of Justice (DoJ), Ripple CEO Brad Garlinghouse has issued a clarification on the company holding 4.7 million Ripple shares. Distancing his company from Linqto, which is currently under the scrutiny of federal investigators, Garlinhouse said that all the shares held by the investment firm were acquired through secondary markets, and the blockchain firm never sold them directly.
Brad Garlinghouse Clarifies on Linqto Shareholder Confusion
Ripple CEO Brad Garlinghouse has addressed growing concerns from individuals who believed they were purchasing Ripple shares through investment platform Linqto. According to Garlinghouse, Linqto currently holds 4.7 million Ripple shares, all of which were acquired via the secondary market from existing shareholders, and not directly from Ripple. He further emphasized that neither Ripple sold any shares to Linqto nor do they have any formal business relationship with the platform. In his message on the X platform, the Ripple CEO wrote:
“Ripple has never had a business relationship with Linqto, nor have they participated in our financing rounds. We stopped approving more Linqto purchases on secondary markets in late 2024 amid growing skepticism”.
Garlinghouse clarified that he has no idea how Linqto managed participants who received representative units of Ripple shares. He added that he cannot provide any reassurances about Linqto’s business practices
The statement comes as retail investors demand transparency on the status of their supposed equity in Ripple. Just as Ripple has been coming out of its long-fought SEC lawsuit, the company finds itself in hot water again. However, Brad Garlinghouse is making things clear to avoid ruffling feathers with the federal authorities.
Currently, Garlinghouse is putting a greater focus on building Ripple and XRP, and expanding the company’s market footprint as the SEC case nears.
Linqto Facing Bankruptcy
As Linqto stares at a potential bankruptcy with a user base of 13,000, its promise to “democratize” access to pre-IPO Ripple shares is rapidly crumbling. Last week, attorney John E. Deaton described the situation as a “total clusterfuck,” revealing that around 11,500 Linqto users had invested in special purpose vehicles (SPVs) that were allegedly structured to hold Ripple shares. Of particular concern is the claim that up to 5,000 of those investors may be non-accredited.
Just before Brad Garlinghouse’s clarification, Ripple Chief Technology Officer David Schwartz clarified that investors did not actually own Ripple shares directly. “You don’t own the shares directly,” Schwartz posted, “but you own a portion of a legal entity that owns the shares.”
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