Linqto Bankruptcy Exposes Risks in Private Markets

Linqto, a platform that allowed retail investors to buy shares in private companies, has filed for Chapter 11 bankruptcy amid investigations by the SEC and FINRA into alleged securities law violations and unclear corporate structures. Internal probes revealed that customers may not have actually owned the securities they purchased, raising major regulatory concerns. The company managed about $500 million in shares across 111 firms, including 4.7 million Ripple shares, but faced difficulties verifying customer entitlements and investment eligibility. Linqto has secured up to $60 million in debtor-in-possession financing from Sandton Capital Partners to maintain operations during restructuring. The case underscores significant risks for retail investors in the pre-IPO and private share market, which lacks transparency and oversight. The situation serves as a warning for those seeking access to high-profile startups without public market protections.