It is reported that a company on the brink of bankruptcy holds a large amount of Ripple shares! Ripple CEO Brad Garlinghouse made a statement!

The US-based private equity investment platform Linqto offers a pioneering private market opportunity for small investors, while now being on the brink of bankruptcy and under federal investigations.

The developments following the aggressive sales campaign named "Spike Day" launched by the company's former CEO William Sarris in January 2023 have left investors facing a major scandal.

According to emails obtained by the Wall Street Journal, Sarris pressured employees to have investors sell Ripple shares at least 60% above Linqto's purchase price. Despite the SEC generally prohibiting price increases above 10%, this information was not shared with clients, and Linqto made a profit of 2 million dollars from these transactions. An independent law firm's review revealed that these transactions could be considered securities fraud.

What is even more concerning are the results of an internal investigation conducted by the company. The examination in question revealed that Linqto users never actually had direct ownership of the shares they thought they owned, and that some investors were legally not qualified to participate in such investments. These findings, combined with the statements from the new management indicating that Linqto will undergo restructuring under bankruptcy protection, have made the company's future increasingly uncertain.

The company is estimated to manage approximately $500 million in customer funds. Linqto set out with the promise of providing access to private technology companies like SpaceX and Anthropic for investors looking to avoid the tight regulations of public markets. However, the company, which drew attention with aggressive "guerrilla marketing" tactics, tried to boost its sales by triggering investors' "fear of missing out" (FOMO) through social media posts and exaggerated email campaigns.

Ripple CEO Brad Garlinghouse also made a statement regarding the matter, stating that Ripple has no official business relationship with Linqto, and that Linqto only purchased 4.7 million Ripple shares from the secondary market. Garlinghouse said regarding the situation where investors believe they have purchased Ripple shares, but in fact own "representative units" sold by Linqto, "I cannot provide any assurance on this matter." It was also shared that Ripple's relationship with Linqto will completely end by the end of 2024.

Although the financial impact of the scandal on investors has not yet become clear, it is expected that Ripple shares have significantly appreciated over time, and therefore some individuals who invested indirectly through Linqto may still be in profit. However, uncertainties regarding the company's legal process and investors' rights continue.