Called John E. Deaton, a Ripple investor and XRP lawyer, he announced a big victory for Linqto’s client, who came out of today’s Texas Bankruptcy Court. The proposed $60 million debtor loan has been cancelled, according to Deaton.
rear Submit For US Chapter 11 bankruptcy last month, Linqto devised a plan to use customer-owned shares as collateral for a $60 million loan.
This has caused a stir for customers affected by the company’s bankruptcy. However, Deaton filed a formal request with the court, asking the judge to impose constructive trust to protect the client’s assets.
About linqto:
At today’s hearing in Texas Bankruptcy Court, the debtor (@linqtoinc) lawyers and the debt committee lawyers announced the settlement.
$60 million DIP loans using customer stocks such as @ripple @circle @krakenfx @upholdinc are off.
My…https://t.co/zp2hghbyis
-John E Dealon (@Johnedeaton1) August 19, 2025
The good news is Constructive trust Linqto has deleted the loan plan, so there is no need to file a lawsuit to protect the client’s assets.
Spread in battle to protect their names
Linqto, a private investment platform that allows investors to buy stocks at beginners’ public offering companies, holds 4.7 million Ripple stocks and other stocks in Circle, Kraken and Aphold. Therefore, protecting Ripple’s name is in the greatest interest of Ripple’s lawyers.
Reports say former CEO William Sarris has tried to sell Rinqto’s 11,000 customers at least 60% more stake in Rinqto than what he bought. This breaks the SEC rules for markup of over 10%, and further mentions the ripple name.
Additionally, Ripple has been accused of being directly familiar with Linqto. But Ripple Girling House Say, I cleaned the air “Except that Linqto is a shareholder, Ripple has never developed a business relationship with Linqto or participated in the funding round.”
According to Garlinghouse, Ripple stopped approval for the purchase of its secondary stock LinqTO in late 2024. The move came when the Financial Industry Regulatory Authority (FINRA) completed a review of Linqto Capital, Linqto’s broker-dealer arm.
Linqto customers fear a fate like FTX
Linqto has withdrawn its loan plan and leaves customers with legal documents indicating that the shares belong to them, not the company that the shares are bankrupt. Here’s the reason. Constructive trust was like the shield that lawyers wanted to create.
However, the plan has been cancelled so at least for now, no shielding is required. Still, the risk is that the company could be in an advantage if constructive trust is not imposed later.
last week, Deaton I said, “I explained that it was being attempted as an attempt to theft of client funds, and I ask the court to impose a constructive trust, protecting the funds and shares from being collateral or sold.” This means that constructive trust is extremely important.
Linqto customers are worried that their cases could turn out to be like FTX cases. They wonder how they will regain their funds and stocks. Assume it plays like FTX. This means that deposits belong to bankruptcy property and directly to the customer.
Furthermore, assets can be settled, and the money collected is distributed not only to customers but to all creditors. This means that customers may get a small portion of the value of their stock, depending on the amount remaining. Don’t forget the long legal battle.
Linqto closed its platform in March. That means I can no longer make money. According to court documents, the SEC told the company it is still considering possible violations by Linqto and its affiliates.
