Popular XRP lawyer John Deaton has filed a class action lawsuit against Linqto founder and former CEO William Sarris, accusing him of fraud in selling unlicensed shares of a private company. The lawsuit filed on July 9 claims that Sarris used unlawful methods to sell cryptocurrency shares.
According to the lawsuit, Darris misled customers with false information and unfair pricing to illegally sell shares in private companies, including Ripple, Uphold, and Kraken. Terrett stated on X:
“The suit alleges Sarris orchestrated a multi-year scheme using undisclosed markups (as high as 60%), misleading exemptions, and unlicensed sales tactics to sell shares in private companies like @Ripple, @UpholdInc, and @krakenfx via SPVs on Linqto’s platform.”
Deaton filed the case on behalf of thousands of retail investors who were affected by Linqto’s bankruptcy.
Linqto bankruptcy attorney, Samuel A. Schwartz, stated that company advisors are planning to use the bankruptcy process to raise funds to repay the creditors. However, Linqto will most likely try to negotiate a bankruptcy payout plan with regulators before it presents a proposal to creditors for a repayment vote.
Since Linqto has generated very little cash because of its suspension in March, the company is trying to pay its debts through loans. Mr. Schwartz stated that the company has $60 million in loans lined up from Sandton Capital Partners to fund bankruptcy.
“We think we have significant resources to make distributions to customers.”
Linqto has filed for bankruptcy. The company’s operations were suspended in March, and it is now seeking to use the bankruptcy process, backed by $60 million in loans, to repay its creditors and address the allegations of fraudulent share sales.
William Sarris is accused of orchestrating a multi-year scheme involving undisclosed markups (as high as 60%) on private company shares, using misleading legal exemptions to avoid transparency, and employing unlicensed sales tactics. He allegedly sold shares in companies like Ripple, Uphold, and Kraken through Special Purpose Vehicles (SPVs) on Linqto’s platform without proper disclosure.
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