Ripple CEO denies ties with investment platform Linqto amid fraud probe, bankruptcy concerns

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

Garlinghouse’s statement follows reports revealing that the San Francisco-based fintech firm, which facilitates the sale of shares in private companies, may have misled thousands of retail investors about the nature of their ownership and violated federal securities laws.

Private shares like these are typically available only to accredited or institutional investors via secondary markets or private equity platforms, and their sale is subject to company approval and transfer restrictions.

As the Journal noted, former Linqto CEO William Sarris orchestrated a high-pressure sales campaign internally dubbed “Spike Day” to offload Ripple shares to retail investors at prices allegedly 60% higher than what Linqto had paid, without disclosing the markup. The company reportedly earned $2 million from the campaign.

Ripple’s CEO clarified that Linqto did not directly purchase Ripple shares from Ripple, but went through secondary markets.

“What we know from our records is Linqto owns 4.7M shares of Ripple, solely purchased on the secondary market from other Ripple shareholders (never directly from Ripple),” Garlinghouse wrote on X.

“Apart from Linqto being a shareholder, Ripple has never had a business relationship with Linqto, nor have they participated in our financing rounds,” he noted, adding that Ripple stopped approving further Linqto purchases on the secondary market in late 2024 due to growing skepticism about its practices.

Linqto also allegedly allowed non-accredited investors into restricted deals and marketed to users in sanctioned countries such as Iran and North Korea.

New management has acknowledged “serious securities law violations” and is reportedly preparing for a possible bankruptcy restructuring.

All Linqto investors are currently locked out of accessing their holdings due to ongoing investigations, including those who participated in Ripple share sales and more recent offerings.