Pro-XRP attorney John Deaton has accused Linqto of attempting to keep profits rightfully earned by investors through a controversial refund strategy. The move has caused outrage among users, many of whom fear losing returns from significantly appreciated private equity investments.
According to Deaton, Linqto’s plan to refund only the initial investment amount, ignoring the substantial gains investors made on assets like Ripple and Circle.
He revealed that he invested $30,000 in Circle through Linqto, which is now valued at $157,000. Under the proposed refund model, the platform would return just the original amount while retaining over $120,000 in profit.
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This development comes after Linqto abruptly froze user accounts and suspended its operations on February 27. Panic spread among the 14,000 users of the platform, many of whom had relied on Linqto for early access to pre-IPO corporations, including a reputed 3 percent stake in Ripple Labs.
Deaton criticized the platform’s handling of profitable deals, arguing that refunding at the entry price cheats investors out of the returns they helped create. He indicated the June 2024 Repurchase offer of Ripple at the rate of $175 per share and said he had bought it for $33.
If Linqto profits only the initial amount, it will keep the difference in the prices and deprive the users of the value gained.
Meanwhile, concerns about Linqto’s financial stability continue to grow. Rob Cunningham, founder of the Free Linqto advocacy group, stated that users believe the platform’s reserves may have been depleted due to mismanagement or deliberate actions.
The slumping trust in the company has increased investors’ demands for answers to their questions.
Investors Rally as Deaton Prepares Legal Challenge
While acknowledging that failed investments like Polysign may justify refunds, Deaton warned that the same approach should not apply to profitable assets. He made it clear that any move to reclaim gains from successful deals will be challenged, potentially through legal means.
He also advised the XRP community to beware of opportunists who are out to take advantage of the situation. Deaton encouraged users not to panic-sell or proffer low-valued prices to third parties intending to cash in on investor resentments.
Meanwhile, an in-depth exposé of Linqto’s internal operations is expected, as most people hope that this will finally bring much-anticipated clarity to a developing financial scandal.
Linqto’s refund proposal has sparked severe backlash, with investors and advocates like Deaton raising alarms over what they view as an attempt to seize legitimate profits. With the threat of lawsuits and increased attention, one wrong step by the platform may leave thousands of investor accounts empty.
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