Crypto lawyer and XRP advocate John Deaton filed a lawsuit against Linqto over fraudulent stock sales. Linqto is not a crypto company, but it allegedly broke the law in selling stocks related to the industry.
According to the suit, the company used misleading tactics and unjustified 60% markups to sell shares in Ripple, Kraken, and other firms. The suit aims to recoup investors’ losses and expose criminal misconduct.
John Deaton’s Linqto Lawsuit
John Deaton is a prominent crypto lawyer and XRP advocate, participating in the SEC v Ripple case and challenging Elizabeth Warren’s Senate seat last year.
Today, however, Deaton is taking a case of indirect interest to the crypto industry, as he filed a lawsuit against Linqto for fraud in selling Web3-related company stocks.
Linqto is an investment platform, but this case is nonetheless particularly relevant to the crypto community. Deaton alleges that Sarris used a variety of illegal practices to sell stock in Ripple, Kraken, Uphold, and several other crypto firms.
So, what were these alleged violations? The lawsuit claims that Linqto marked up crypto stocks by as much as 60%, scalping customers who wished to invest in Ripple or other companies.
Deaton also accused the firm of creating misleading exemptions, employing illegal sales tactics, and knowingly violating SEC/FINRA regulations to do this.
Just yesterday, Linqto filed for bankruptcy, so Deaton’s lawsuit specifically is targeting founder/CEO William Sarris. He filed this move as a class-action lawsuit, aiming to recoup losses for thousands of retail investors.
By going after Sarris, Deaton can avoid any bankruptcy protections that might shield Linqto, maximizing the chances of recovering user funds.
Naturally, the crypto community reacted with great enthusiasm. Several firms promoted Linqto to the XRP fan community, and this lawsuit might help expose any criminal behavior.
Thanks to Deaton’s reputation as a pro-crypto litigator, observers are expecting positive outcomes.
Still, this whole incident highlights the need for sensible pro-crypto regulation and consumer protection measures. Lawsuits like the Linqto case might help recover lost assets, but it’s better to prevent criminal fraud ahead of time.
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