XRP: Ripple CEO Denies Any Business Ties with Linqto

XRP has been in the spotlight again as Ripple CEO Brad Garlinghouse recently addressed investor concerns regarding its connection to Linqto, an investment platform now under federal scrutiny. His remarks aim to set the record straight amidst growing inquiries over Linqto’s sale of pre-IPO Ripple shares to retail investors.

Garlinghouse made the statement in response to a Wall Street Journal report outlining a federal investigation into Linqto by the Department of Justice and shedding light on its possible insolvency issues.

In his statement on X (formerly Twitter), Garlinghouse made it clear that Ripple has absolutely no commercial engagement with Linqto. The investment platform, he noted, currently holds around 4.7 million Ripple shares. However, these were not sold directly by Ripple. Instead, Linqto acquired them from previous stakeholders through secondary market transactions, highlighting the absence of any formal business arrangement between the two entities.

Garlinghouse further emphasized that Ripple has never accepted any funding from Linqto or collaborated with the platform in its fundraising initiatives. This distinction is particularly crucial as scrutiny mounts over Linqto’s financial practices.

Linqto has built its model on allowing general investors to access pre-IPO equity in high-growth companies, with Ripple being one of its headline offerings. Several of Linqto’s Ripple share investment campaigns have seen tremendous interest, often selling out rapidly. A strong example of this high demand occurred in October 2023 when Linqto reopened the opportunity to purchase Ripple shares, following a previously sold-out round.

Despite this investor enthusiasm, skepticism around Linqto’s operations has surfaced. Many have voiced concerns on social media regarding the legitimacy and transparency of the platform’s offerings. The increasing complaints prompted Ripple to stop approving additional transactions involving Linqto’s acquisition of its shares on the secondary market toward the end of 2024.

Garlinghouse’s public clarification comes as Ripple aims to separate itself from the legal controversies and regulatory headwinds confronting Linqto. This distinction becomes increasingly important given the layers of investigations now involved.

The trouble for Linqto began to escalate in late 2024. According to a report by The Crypto Basic, former Linqto CRO Gene Zawroty filed a lawsuit against the company and senior leadership, citing fraudulent activities, stock manipulation, and insider trading. These allegations triggered significant concern among investors and prompted regulatory bodies to take a closer look at Linqto’s financial conduct.

Federal authorities, including the SEC and a second undisclosed agency, are reportedly investigating the platform. Confirming these developments, former Senate candidate and pro-crypto lawyer John Deaton stated that pre-IPO Ripple shares sold through Linqto are not held by Ripple itself. Rather, he suggested these shares are controlled by a Special Purpose Vehicle (SPV), a common structure used to pool investor funds.

Deaton’s insight, along with Garlinghouse’s clarification, serves to untangle Ripple from Linqto’s questionable practices and put to rest fears that Ripple had any direct involvement in distributing shares through the platform.

Related: Expert Advice: Sell XRP If You’re Confused

As of now, Ripple continues to focus on its broader mission in blockchain innovation and cross-border payment technology, distancing itself from any collateral fallout from Linqto’s legal troubles. The situation remains fluid, and Ripple stakeholders will likely stay alert as the investigation unfolds and any possible bankruptcies play out. What remains clear is that Ripple is taking a firm stand to safeguard its credibility and investor trust.