Pro-XRP Advocate John Deaton Files Lawsuit Against Linqto for Deceiving Crypto Investors

Pro-XRP lawyer John Deaton has launched a high-profile class-action lawsuit against Linqto, a private investment platform, and its former CEO, William Sarris. Filed on July 9, 2025, in New York federal court, the lawsuit accuses Linqto of misleading thousands of retail investors through a multi-year scheme involving securities fraud, undisclosed markups, and deceptive sales practices. This legal battle has drawn significant attention in the crypto community, particularly among XRP supporters, given Deaton’s prominence as a vocal advocate for Ripple and its investors.

Allegations of Securities Fraud and Deceptive Practices

The lawsuit alleges that Linqto operated as an unlicensed broker-dealer, selling shares in private companies like Ripple, Uphold, and Kraken through unregistered Special Purpose Vehicles (SPVs). These shares, sold with markups as high as 60%, were marketed without proper disclosures, violating U.S. securities laws enforced by the SEC and FINRA. Investors were allegedly misled about the ownership and value of these assets, leading to significant financial harm. Deaton’s legal strategy targets Sarris personally, bypassing Linqto’s recent Chapter 11 bankruptcy filing on July 8, 2025, to hold him accountable and secure compensation for affected investors.

The case highlights Linqto’s failure to register as a broker-dealer and its use of deceptive tactics to lure investors. With ongoing SEC and DOJ investigations into Linqto’s operations, Deaton aims to protect the rights of approximately 11,500 Ripple SPV unit holders and other investors, ensuring they receive fair payouts reflecting the current value of their investments.

Impact on Crypto Investors and Ripple’s Role

Deaton’s lawsuit emphasizes the potential for investors to recover more than their initial investments due to the appreciation of assets like Ripple, which holds an estimated value of $800 million based on a recent buyback offer of $175 per share. Other assets, such as Circle, have appreciated up to six times their original value. Deaton has criticized Linqto’s proposed refund plan, which would only return original investment amounts, potentially depriving investors of significant gains. The lawsuit seeks to prioritize investor claims over Linqto’s shareholders in bankruptcy proceedings, leveraging liability insurance or settlements to create a recovery pool.

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Also Read: Ripple vs. SEC Ends, Stablecoins Get Green Light: A New Era for U.S. Crypto Policy

Notably, Ripple’s CEO, Brad Garlinghouse, clarified that Ripple has no direct business relationship with Linqto. The 4.7 million Ripple shares held by Linqto were purchased on the secondary market, not directly from Ripple, distancing the company from the lawsuit’s allegations.

What’s Next for Investors and the Crypto Market?

The outcome of this lawsuit could set a precedent for how private investment platforms handle crypto-related securities. Deaton’s aggressive pursuit of justice underscores the importance of transparency and regulatory compliance in the crypto industry. As Linqto navigates bankruptcy and regulatory scrutiny, investors are encouraged to stay informed about their rights and potential recovery options. The case also highlights the growing role of legal advocates like Deaton in protecting retail investors from fraudulent practices in the rapidly evolving crypto market.

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