The post Pro-XRP Lawyer John Deaton Sues Linqto for Allegedly Misleading Crypto Investors appeared first on Coinpedia Fintech News
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.
John Deton Lawsuit Against Linqto
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.”
Key Highlights of Deaton Lawsuit Against Linqto
Deaton filed the case on behalf of thousands of retail investors who were affected by Linqto’s bankruptcy.
The company charged investors 60% above the actual price and misused legal exemptions to avoid transparency.
The sale methods in Linqto violated the investor protection laws, as it did not provide proper disclosure, which allegedly misled thousands of users.
Deaton seeks maximum fund recovery for affected Linqto users while preventing reduced monetary settlements.
Despite being warned by the SEC and FINRA (in 2023 and 2024), Linqto violated multiple regulations– acting without a registered broker-dealer and operating unregistered investment company.
What’s Next for Linqto?
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.”