Following concerns about Linqto’s impending bankruptcy, pro-XRP lawyer John Deaton assures investors that they may recover more than the value of their initial investments.
For context, the Wall Street Journal disclosed that the DOJ is currently investigating Linqto for regulatory compliance violations. Earlier, Attorney Deaton also suggested that the SEC and another three-letter agency are investigating Linqto for potential violations of federal securities laws.
As a result, some market commentators suggested that the company could be facing an impending bankruptcy. Amid this speculation, Deaton emphasized that no one can predict the outcome of the process.
Real Truth Will Emerge Soon
Meanwhile, the former U.S. Senate Candidate confirmed that he has spoken with several Linqto stakeholders, including its founder, current management, sponsored influencers, and board members, to gain a better understanding of the current situation.
Three former employees and sponsored influencers said they were unaware of any securities law violations. On the other hand, some executives at Linqto and WSJ affirmed that the securities law violations were severe. They attribute the entire blame to the company’s founders, Bill Sarris and Vicki Sarris, whom they believe committed fraud.
Nonetheless, Deaton said he learned from other sources that some entities are exaggerating things and that the violation was a minor infraction. Based on these contradictory claims, the lawyer insisted that it was only a matter of time before the public discovered the real truth.
Customers Hold Priority on Claims
Furthermore, attorney Deaton emphasized that the company has no creditors. Therefore, its customers, including the 11,500 Ripple SPV unit holders, will be prioritized over Linqto’s equity shareholders.
Deaton confirmed that all underlying holdings, including pre‑IPO Ripple and Kraken shares invested by Linqto customers, remain intact.
He referenced a statement from Ripple CEO Brad Garlinghouse, who also confirmed that Linqto holds 4.7 million units of its pre-IPO shares. Garlinghouse had noted that Linqto acquired these shares through the secondary market from existing shareholders.
Linqto Customers Could See Gains
Garlinghouse added that the value of Ripple shares has surged tremendously, meaning that Linqto unit holders could see gains on their initial investments.
Citing Ripple’s recent share buyback offer at $175 per share, Deaton estimated Linqto’s 4.7 million pre‑IPO Ripple shares to be worth roughly $800 million. Similarly, he suggested that Circle’s shares have soared by 6x from the amount investors initially paid.
Based on this growth, Deaton estimated that an investment of $30,000 in Circle’s SPV units via Linqto is now valued at $150,000.
“In sum, with no creditors and the above-referenced value, there’s no valid reason people won’t get MORE than their initial investment,” Deaton wrote. He promised to ensure that investors get full compensation.
Duration of Bankruptcy Proceedings
Meanwhile, besides a bankruptcy, Deaton suggested that Linqto might undergo restructuring or a buyout. In the event of a bankruptcy, he said a court could approve a reorganization plan within nine months if the stakeholders quickly reach a consensus.
However, in the absence of a quick consensus, the lawyer asserted that the bankruptcy proceedings could last for more than two years, with legal fees exceeding $150 million.
DisClamier: This content is informational and should not be considered financial advice. The views expressed in this article may include the author's personal opinions and do not reflect The Crypto Basic opinion. Readers are encouraged to do thorough research before making any investment decisions. The Crypto Basic is not responsible for any financial losses.
