- XRP lawyer Deaton revealed direct conversations with Linqto’s leadership and stakeholders, uncovering mixed reactions, some alleging fraud by founders Bill and Vicki Sarris.
- Deaton assured that customer investments in pre-IPO firms like Ripple and Circle are intact, with Ripple shares now valued around $800 million and Circle investments reportedly yielding a 6x return.
Pro-XRP lawyer John Deaton has stepped in to soothe the increasing panic among Linqto investors. This comes after updates regarding the private equity platform possibly going into bankruptcy as federal agencies investigated it.
XRP Lawyer Sheds Light On Linqto Controversy
The case was handled by Deaton after the Wall Street Journal raised an issue that the U.S. Department of Justice (DoJ) is investigating Linqto on possible regulatory compliance. Earlier, he indicated the possibility of the SEC and another federal agency investigation on the company, claiming that it had violated securities law.
Now, there are speculations that the company might be facing insolvency, Deaton, however, made it clear that the game is not over yet. “No one can predict how this will unfold,” he said.
For better clarity, Deaton disclosed that he has had direct interactions with the founder of Linqto, the top management, the board of directors, and social media influencers related to the platform. These revelations saw mixed feedback.
On one hand, some previous employees and influencers didn’t admit to having been aware of the malpractice. Meanwhile, some revealed that insiders already knew about the fishy practices in play. They even cited the founders of Linqto, Bill and Vicki Sarris, as being responsible and accused them of fraud.
There has been a series of conflicting accounts, where part of the stakeholders indicated that the legal problems are exaggerated. Nonetheless, Deaton stated that there are sources that do not think the misconduct are serious ones.
Further, the pro-XRP lawyer noted that Linqto customers and not creditors, would first get claim rights as the company would not have outstandings. That counts in more than 11,000 persons who invested in Ripple as a SPV (Special Purpose Vehicle) of Linqto.
Deaton assured that base assets of customers are safe. He reported that investments in such pre-IPO companies as Ripple and Kraken are yet to be lost. According to Ripple CEO Brad Garlinghouse, Linqto indeed bought 4.7 million Ripple shares acquired via the secondary transactions.
The Ripple Effect In Spotlight
With Ripple’s share value seeing notable appreciation, the valuation of customer-held units has significantly increased. Garlinghouse highlighted the company’s recent buyback offer priced at $175 per share. Based on this, Deaton estimated Linqto’s Ripple holdings to be worth around $800 million, as reported by CNF.
Deaton also cited other gains, including a 6x increase in the value of Circle shares since initial customer investment. “An investment of $30,000 in Circle’s SPV units is now worth around $150,000,” he said. Thus, Deaton concluded, “There’s no valid reason people won’t get MORE than their initial investment.”
Though there is the risk of going into bankruptcy, Deaton hinted that the alternative might include a buyout or a restructuring. If the bankruptcy is in effect, it could result in a reorganization plan within a year if the interested parties reach agreement. Otherwise, the whole process may take more than 2 years and the legal expenses may exceed $150 million.
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