Pro-XRP Lawyer Files Securities Fraud Class Action Against Linqto Founder

The complaint also accused Sarris of relying on misleading exemptions and unlicensed sale tactics to sell pre-IPO stock of private companies via special purpose vehicles (SPVs).

Sarris Ignored Warning About US Law Violations

Additionally, Attorney Deaton asserted that Linqto operated as a broker-dealer for several years without obtaining the required registrations from the SEC and FINRA.

The complaint stated that Linqtos legal team flagged these violations in internal memos from 2023 and 2024. Its lawyers warned that Linqto was violating multiple U.S. laws in the way it sold and structured the SPV offerings.

However, the complaint alleged that Sarris ignored these warnings and continued using the same sales tactics.

Attorney Deaton, who represented thousands of XRP holders in the Ripple lawsuit, emphasized that the latest securities fraud class action specifically targets Sarris. This is part of an effort to prevent him from hiding under bankruptcy protection.

Interestingly, Deaton stated that any recovery, whether through a settlement or liability insurance, would be directly channeled to retail investors to fully compensate them.

Class Action Applies to All Linqto Customers

In a series of X posts, Deaton confirmed that the class action applies to all Linqto customers, including those residing outside the United States. According to him, Linqto retail customers are not required to submit any official application to join the class action.

“If you live outside of America, you are also included in anything related to Linqto, private lawsuits, and bankruptcy proceedings,” Deaton wrote on X.

Additionally, he promised to discuss the next steps of Linqtos bankruptcy proceedings later today. The pro-XRP lawyer stated that investors would have a voice in the bankruptcy proceedings.

Linqtos Debacle

Meanwhile, Linqto has been in the news since last month, following a Wall Street Journal report that confirmed federal authorities are investigating Linqto for potential violations of U.S. laws.

The company admitted its wrongdoings this week through the bankruptcy protection filing. As previously reported, Deaton claimed that since Linqto has no creditors, its retail users would get paid first before equity shareholders.

Furthermore, he reassured retail investors that Linqto still holds the underlying pre-IPO shares of private companies. Notably, the lawyer referenced a statement from Ripple CEO Brad Garlinghouse, who confirmed that Linqto has 4.7 million units of Ripples pre-IPO shares.

He added that users will receive more than the amount they invested in these pre-IPO shares.