John Deaton, a prominent attorney representing the XRP community, has filed a class action lawsuit against William Sarris, the founder and former CEO of Linqto, accusing him of fraud. According to the lawsuit, Sarris is alleged to have sold unlicensed shares in private companies, including @Ripple, @Uphold, and @krakenfx via SPVs on Linqto’s platform
The legal filing, made on behalf of thousands of retail investors affected by Linqto’s bankruptcy, highlights several unlawful practices by Sarris.
Deaton is suing Sarris on accusations of a multi-year conspiracy that involved marking up stock prices up to 60% and taking advantage of vague wording in legal exemptions to avoid complying with transparency requirements. The case claims that such acts fooled shareholders and broke the law on securities.
Linqto, a company that helps users invest in companies that are not publicly traded, is alleged to have failed to divulge important information to the users. This involved inappropriate pricing and unlicensed sales strategies that were against the SEC and FINRA rules.
Moreover, internal memos in 2023 and 2024 showed that the company received a warning over its violations, but Sarris proceeded with the selling practices despite an alert.
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 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 an unregistered investment company.
Lawsuit Seeks Justice for Affected Investors
The case requests substantial compensation for the victims of Sarris’s suspected malpractice. Deaton is firm that whatever funds come back, either as a result of liability insurance or settlement, will be used to pay innocent investors who were hurt. Specifically, the suit highlights the company’s failure to make the appropriate disclosures that would have increased the investors’ decision-making.
Following the lawsuit, Linqto’s lawyer, representing it in bankruptcy, Samuel A. Schwartz, noted that the company would utilize bankruptcy to settle its debtors. But because Linqto has been experiencing significant financial setbacks, it has tried to obtain financing in the form of loans.
The company has also been pre-arranged with $60 million loans through Sandton Capital Partners to facilitate its bankruptcy; this is equivalent to the loans that it is allowed to pursue.
In spite of this, Deaton is determined to make Sarris answer. He is not just concerned with getting the money back but also with the regulators’ responsibility to ensure that the planning that goes into the platform’s activities is carried out within their reach.
Uniting these thousands of investors in a class action lawsuit, John Deaton also seeks justice and hopes to give this case the precedence it deserves for honesty and responsibility within the emerging world of cryptocurrency and investment.
Also Read: Bitcoin’s Massive Breakout: Peter Brandt Predicts BTC Could Skyrocket to $135K
