Linqto Chapter 11 with $450M Ripple Stake Amid SEC Probe
Linqto filed for Chapter 11 bankruptcy in Texas on July 8, 2025, disclosing over $500 million in assets, including a $450 million Ripple position. The Linqto bankruptcy filing follows an SEC investigation into alleged unpermitted share transfers, improper securities structuring, and sale of inflated Ripple shares by up to 60%, potentially breaching SEC markup limits. Former Linqto executives now face lawsuits over compliance failures and retaliation. A bankruptcy hearing is scheduled for Tuesday, where restructuring officers and debt advisors will testify. Ripple confirmed no formal partnership with Linqto beyond share ownership and halted secondary share approvals in late 2024 after a FINRA review. This Linqto bankruptcy and ongoing SEC investigation underscore growing regulatory scrutiny of secondary crypto markets. Crypto traders should note the risks in Ripple (XRP) trading and apply thorough due diligence.
Bearish
The Linqto bankruptcy and SEC investigation introduce significant uncertainty around Ripple (XRP). In the short term, the allegations of inflated pricing and unpermitted transfers, combined with lawsuits and regulatory scrutiny, can dampen trader confidence and drive selling pressure. Over the long term, while Ripple’s core business is unaffected, heightened regulatory oversight of secondary markets may restrict liquidity and increase compliance costs. This sustained uncertainty is likely to exert downward pressure on XRP’s market performance.