Class Action Lawsuit Targets Linqto Co-Founder William Sarris

In a significant legal move on July 9, 2025, attorney John E. Deaton filed a class action lawsuit against William Sarris, former CEO of Linqto, for securities fraud.

The legal filing alleges a violation of SEC and FINRA regulations, potentially affecting numerous retail investors and instigating broader concern about regulatory compliance in similar platforms.

Legal Allegations and Bankruptcy Proceedings

Attorney John E. Deaton on behalf of many retail investors, initiated a class action lawsuit against former Linqto CEO William Sarris. The lawsuit accuses Sarris of inflating prices by up to 60% on shares of private companies like Ripple and Uphold without disclosure. Internal memos reportedly warned Sarris about regulatory breaches that he ignored, potentially involving an estimated 10,000 investors impacted by the alleged scheme.

As a result of these accusations, Linqto has entered Chapter 11 bankruptcy protection due to financial exposure and insufficient regulatory compliance. CEO Dan Siciliano stated, “The only way forward is to seek court-supervised protection, to restructure into a profitable, law-abiding organization and accelerate the resolution of these investigations.” Linqto’s most prominent offering, Ripple (XRP), raises questions about underlying share ownership validity. However, no direct on-chain impacts have been noted thus far.

While the lawsuit and bankruptcy filings have created concern among investors, industry leaders have not issued substantial statements regarding the matter. The SEC and FINRA are actively investigating potential regulatory violations.

Market Impact and Regulatory Implications

Did you know? Regulatory actions in the cryptocurrency sector can lead to significant market shifts and investor uncertainty.

According to CoinMarketCap, XRP is currently priced at $2.38 with a market capitalization of $140.80 billion and a 4.15% market dominance. Its fully diluted market cap stands at $238.37 billion, and the 24-hour trading volume saw a 16.93% increase to $4.28 billion. Over 90 days, XRP’s value increased 23.30% but decreased 1.28% over 60 days.

The Coincu research team indicates that Linqto’s situation underscores the need for regulatory clarity in secondary market investments. The case highlights potential vulnerabilities in proxy investment platforms and emphasizes the importance of compliance to prevent similar issues in the future.