1 year ago
Bankrupt Fintech to Liquidate Private Company Stakes
Linqto, a company that let people invest in private companies, went bankrupt.
Now, they need to sell investments they own to pay for the bankruptcy process.
Before going bankrupt, Linqto promised customers access to investments in private companies, like Ripple and CoreWeave.
However, this promise proved problematic.
The company is under investigation by the SEC for potential issues with how they checked if investors could invest.
These types of investments can be risky for regular people.
The court case is in Houston, Texas.
Bankrupt fintech firm Linqto Inc. received court approval to sell off its private company stakes to fund its bankruptcy.
Linqto acquired stakes in private companies for both itself and its customers before shutting down and filing for bankruptcy.
The firm's collapse highlights risks for retail investors in illiquid assets, especially with increased access to private markets.
The US SEC is investigating Linqto over potential failure to verify investor accreditation.
Linqto offered customers stakes in private companies before they went public, a claim later found to be inaccurate.
- Who
- Linqto Inc. and its customers.
- What
- Linqto Inc. will try to sell stakes in private companies.
- Where
- US Bankruptcy Court, Southern District of Texas.
- When
- Recently, following the bankruptcy.
- Why
- To fund Linqto's bankruptcy case.
Linqto's Position
Customer's Perspective
Customer Expectations vs. Reality
Linqto's Position
Linqto offered customers access to private investments, but faced difficulties in transferring these to customers.
Customer's Perspective
Customers expected direct ownership and transferability of the private company shares they were offered by Linqto.
Investor Protection Concerns
Linqto's Position
Linqto's managers possibly failed to verify the investors' financial capability.
Customer's Perspective
Retail investors were potentially exposed to the risk of investing in illiquid and hard-to-value assets.
Key facts
- Company
- Linqto Inc.
- Action
- Selling stakes in private companies
- Purpose of Sale
- Fund bankruptcy case
- Investigation
- US SEC investigating Linqto
- Court
- US Bankruptcy Court, Southern District of Texas
- Potential holdings
- $399 million stake in Ripple, $35 million in Space Exploration Technologies Corp, and $106.6 million in Circle Internet Group Inc.
Quotes
Samuel A. Schwartz
Linqto bankruptcy attorney
“and this is the second part which continues the same thought.”
livemint.com
Sources
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