What Happened to Linqto: Bankruptcy, Recovery Plan and Lessons for Pre-IPO Investors

This section establishes what Linqto legally was, which is not what customers were told, and who was responsible.

Linqto was an issuer that acted like a broker without being one. When you pressed the buy button, you were not buying a share of Ripple or Circle or SpaceX. You were buying a unit in a series of a Delaware series limited liability company that Linqto owned and controlled, at a price Linqto set, from inventory Linqto had bought earlier with its own money. Every party on the other side of your trade was Linqto: seller, price-setter, record-keeper, valuer and venue. That sentence explains almost everything that followed.

The entities

Five names matter, and the differences decide who owes whom.

• Linqto, Inc., the San Jose operating company, founded in 2010 by Bill Sarris, a former financial services architect at Intuit, and Vicki Sarris. Sarris ran it for 14 years (Washington Times, September 3, 2026).
• Linqto Liquidshares LLC, the Delaware series LLC that was supposed to hold the private shares, either directly or through a third-party special purpose vehicle, and Linqto Liquidshares Manager LLC, the manager of those series.
• Linqto Texas, LLC, registered in Texas on April 7, 2025, three months before the filing, and the lead debtor (Sapien Group venue motion, July 16, 2025).
• Linqto Capital LLC, CRD 314557, a New York broker-dealer registered with the SEC and FINRA, chief executive Sean Bowden, and a non-debtor affiliate that did not file (FINRA BrokerCheck, 2026).

The broker-dealer is the tell. Linqto Capital existed, but the retail business ran through the series LLCs rather than through it, the arrangement that allowed markups a registered broker charging a disclosed commission could not have taken.

The people

Bill Sarris was chief executive until the end of 2024. Joseph Endoso, his second in command, served as president and then chief executive. F. Daniel Siciliano, a corporate governance specialist, became chief executive of Linqto, Inc. on January 2, 2025. His arrival is the hinge of the story: new management, new counsel, and an internal investigation into two regulatory inquiries already under way. On March 14, 2025 Linqto announced a new executive team, said several prior executives had been removed, and confirmed that investigation (Business Wire, March 14, 2025). By the filing Jeffrey Stein was chief restructuring officer, and it was Stein and the official committee of unsecured creditors who later chose the trustee and the fund manager (Business Wire, January 13, 2026).

How big it claimed to be, and how big it was

Linqto’s press releases tracked registered users, not investors, and the gap is the most useful number in its marketing history. It announced 500,000 users across more than 110 countries and more than $300M invested in upwards of 50 companies on December 12, 2023, then 750,000 users and more than $350M across 60-plus companies on April 18, 2024 (PR Newswire, December 12, 2023; Business Wire, April 18, 2024).

The bankruptcy record puts the real figure at more than 13,000 customers, and the Justice Department says the platform took in more than $450M from them between 2020 and 2025 (Chapter 11 first-day materials, July 8, 2025; DOJ indictment, September 3, 2026). Roughly 1.7% of the claimed user base ever bought anything. A platform reporting users rather than funded accounts is describing its marketing funnel, not its business.

Linqto’s own capital history is murky and the databases disagree: Tracxn reports $187M raised over 31 rounds from four investors, Crunchbase $8.83M. Tracxn’s round detail does not support its own total, listing one seed, thirty early-stage rounds, a largest round of undisclosed size in February 2024 and a final round of $11K. Treat both figures as unverified at publication. The incentive Sarris worked under is not in dispute. In October 2023 the board granted him about 1.9 million Linqto shares that would vest only if the company completed an IPO, an acquisition or a capital raise valued at $500M or more by the end of 2025, an outcome that depended on revenue, which depended on the markups (DOJ indictment, September 3, 2026).

The platform has accepted no transaction since March 13, 2025, so this is the record of what customers did and where the money went.

Step one: sign up and self-certify

Opening an account was free and took minutes. Linqto required accreditation under SEC Rule 501: income above $200,000, or $300,000 with a spouse, in each of the last two years, or net worth above $1M excluding the primary residence. In practice the process leaned on self-attestation, and the internal review found the platform had been marketing to customers who may not have been eligible to buy private shares at all (Chapter 11 materials, July 2025). Selling unregistered securities to non-accredited buyers breaks the Regulation D exemption the structure depended on.

Step two: pick a company, see a price

The app showed a menu of private companies with a price per share. That price was not a market quote. It was Linqto’s own number, from an internal model, applied to shares bought earlier at a lower price. The government alleges the model was manipulated to maximise revenue and that Linqto displayed offerings as sold out while inventory remained, creating false scarcity so the rest could be repriced upward (DOJ indictment, September 3, 2026).

Step three: what you actually bought

You bought units in a numbered series of Linqto Liquidshares LLC. The series was supposed to hold the underlying shares. The internal investigation found that it frequently did not, for reasons that are almost administrative in their banality and total in their effect:

1. The Liquidshares certificate of formation did not comply with Delaware’s requirements for a series LLC, so the series were never properly formed.
2. No series schedules were attached to the Liquidshares operating agreement, as the agreement required.
3. The master purchase agreement was not executed until after the platform had already begun operating.
4. There was no evidence that securities had been transferred to Liquidshares Manager, or that the record-keeping requirements were met.
5. Transferring the securities into the series would in many cases have violated the purchase agreements Linqto signed and the issuers’ own transfer restrictions.

Ripple made the last point in public. Chief executive Brad Garlinghouse said on July 2, 2025 that Linqto had bought its 4.7 million Ripple shares on the secondary market from other holders, that Ripple had never had a business relationship with Linqto, that Linqto was never authorised to resell or manage those shares, and that Ripple had stopped approving further Linqto purchases in late 2024.

Step four: the 90-day hold and the sell order

Linqto imposed a 90-day holding period from purchase, during which units could be neither sold nor swapped for another security on the platform. After that you could place a sell order back to the platform, minimum $5,000 or your whole position, whichever was smaller, with proceeds said to reach your cash account immediately (Linqto help centre, “How to Execute a Sell Order”, retrieved 2026). This is the feature that made the product feel liquid, and the one BBB complainants named when it stopped: one complaint records liquidity after 90 days advertised and then “zero liquidity on the platform with no relief in sight” (BBB profile, Linqto Inc, San Jose). The sell order was not a market. It was Linqto buying your units back at Linqto’s price with Linqto’s cash. When the cash and the price stopped, so did the exit.

Step five: retirement money

Linqto accepted funds from self-directed IRAs: you linked the account, moved cash to the Linqto cash account and invested from there. Ordinary IRAs at mainstream custodians were not eligible (FinanceBuzz review, 2026; IRA Club partner page). This matters below, because a loss inside an IRA is not deductible.

Step six: how Linqto got paid

Once, at the moment of purchase, invisibly. No management fee, no carry, no administration fee, no commission line. Its explanation was that it bought shares in bulk from founders, employees and earlier investors and resold smaller quantities “at a reasonable markup”, which removed the need for follow-on fees (Linqto marketing, 2024, quoted in Motley Fool and Nasdaq coverage). It never published what the markup was.

There is no menu. Linqto is in a Chapter 11 wind-down, and this section is the record of what was sold, because that inventory is what the recovery is made of.

What the platform sold

A single product type, repeated: units in a series LLC meant to track one private company, bought at a price Linqto set, with no fee line, a 90-day lock and a promised buyback. The minimum rose with the order count: $1,000 on a first order, $2,500 on a second and $5,000 thereafter (Linqto FAQ and help centre, retrieved 2026). Terms were open-ended: no fund life, no target return, no distribution schedule, no capital call. You paid once and waited for an IPO, an acquisition, or a sell order back to Linqto.

The names were the draw and skewed hard toward crypto-adjacent companies the retail audience already followed. Liquidshares held securities in 111 private companies with an estimated fair market value above $500M at the July 2025 petition date, including about 4.7 million Ripple shares. The concentration was extreme: more than $399M in Ripple, over $100M in Circle and about $35M in SpaceX (Chapter 11 filings reported by Debtwire and ION Analytics, July 2025).

The other 108 companies are not broken out anywhere we could read, and no residual can be derived: the three named positions alone come to at least $534M, above the $500M-plus the debtors put on the whole book, so the headline estimate is a floor, not a total.

What has been closed or wound down

Everything. The platform was paused in February 2025 while management sized the compliance problem, and on March 13, 2025 Linqto concluded it could not resume operations and suspended it indefinitely (Business Wire, January 23, 2026). Buying, selling, the cash account and the app all stopped together. The only live products connected to Linqto in September 2026 are the two recovery vehicles created by the confirmed plan, and neither had begun distributing.

This section establishes the true cost of a purchase, which the platform never disclosed and the Justice Department has now quantified.

The stated cost stack

Zero. No brokerage fee, no management fee, no administrative fee, no carried interest, no wire fee, no custody fee, no secondary market fee (Linqto marketing, 2024, as summarised in the Motley Fool and FinanceBuzz reviews). Minimum $1,000 on a first order, rising to $5,000 by the third.

The real cost stack

One charge, taken once, inside the price. The indictment unsealed on September 3, 2026 puts the median markup over Linqto’s acquisition price at about 60% across 2020 to 2025, with more than a quarter of sales above roughly 80% and some above 200%. The class action John Deaton filed in July 2025 alleged undisclosed markups of 20% to 60% on the same facts.

Two reference points make those numbers legible. FINRA Rule 2121 and the 5% policy the industry has run on since 1943 presume that a markup at or above 5% on an equity security is unfair, and disclosure does not make an otherwise unfair markup permissible. The second is the government’s own: the indictment alleges Sarris knew from early on that charging undisclosed excessive markups was unlawful, “particularly those above 10%”. Linqto’s alleged median was six times that line.

The worked example, in dollars

Take $25,000, the size a serious retail buyer would put into one name, and run it through the structure at the alleged median.

Linqto acquires a block at $100 a share and lists it at $160, the 60% median markup. Your $25,000 buys 156.25 units. At Linqto’s own cost it would have bought 250 shares. So $9,375 of your $25,000, or 37.5% of the capital deployed, was the platform’s charge at the moment of purchase. That is not an annual fee. It is a one-time loss of 37.5% of principal before the company does anything.

Now hold five years and assume the company doubles from Linqto’s own cost, to $200 a share, a good outcome in late-stage private equity. Your 156.25 units are worth $31,250; the same $25,000 bought at cost would be worth $50,000. There are no further Linqto fees, so the arithmetic is simple: you finish with $31,250 instead of $50,000, a 25% gain rather than a 100% gain, on a company that doubled. The underlying has to rise 60% from Linqto’s acquisition price just to get you to break-even.

Set that against the same $25,000 in the alternatives. On EquityZen at the 2.5% per side in force since February 19, 2026, entry costs $625 and $24,375 goes to work. On Hiive, a direct buyer pays nothing and a fund buyer up to 4.85%, so $1,213 at worst. On Forge Global, Forge Securities’ Form CRS gives a typical commission of 5%, $1,250 here, with the fee page describing a 2% to 4% range that varies by size and third-party transfer, legal and escrow costs on top. In a Nasdaq-100 index fund at 0.20% a year, five years of fees on a position running from $25,000 to $50,000 is about $375, taking 0.20% on the $37,500 average. Linqto’s embedded charge was roughly 7 to 15 times the published cost of a regulated private-markets route, and 25 times five years of index-fund fees.

The fees nobody quoted

Two more costs appear in no marketing document. The first is the bankruptcy cost: the target recovery is about 95% of fair market value, which on our reading leaves roughly 5% consumed by the process. The second is the debtor-in-possession loan: Linqto announced a commitment of up to $60M from Sandton Capital Partners on filing, and after a $10M interim order the court entered a final order on October 6, 2025 authorising a $25M facility plus a $5M accordion at 14.50% PIK interest (ABF Journal, July 2025; final DIP order). That interest is paid out of the same securities that fund customer recoveries.

For a live platform this section compares marketing claims with realised exits. For Linqto it compares what customers were told they owned with what the bankruptcy will pay, and by which route.

What was claimed

Linqto never published an audited return series, an IRR or a vintage table. Its claims were about scale and access: 750,000 users, more than $350M invested, more than 110 countries (PR Newswire, December 12, 2023; Business Wire, April 18, 2024). The implicit claim did the damage: that a customer who bought Ripple on the app owned Ripple shares, at a price close to the market, redeemable after 90 days.

What was realised

Three facts settle it.

First, title. The internal investigation concluded customers never owned the securities they believed they owned, because the series were not properly formed, the transfers were not properly made and the issuers had not approved them. That is not a valuation dispute. It turned every customer from an owner of shares into an unsecured creditor of a bankrupt company.

Second, price. The alleged median 60% markup means the typical cost basis was roughly 1.6 times what Linqto paid for the same security. Part of the paper gain on a Linqto dashboard was a recovery of the markup already paid.

Third, the portfolio went up anyway, which is why this ends better than most frauds. Circle priced at $31 and closed its first NYSE day at $83.23 on June 5, 2025, up 168% (CoinDesk and Circle, June 2025). Ripple opened a $700M tender at $175 a share on June 10, 2025, well above the roughly $85 implied by the $399M-plus carrying value on Linqto’s 4.7 million Ripple shares at the filing. SpaceX completed the largest IPO on record on June 12, 2026, pricing at $135 a share and raising about $75B. Linqto said on August 10, 2026 that customer-linked securities had risen from $657M in June 2025 to $1.3B in May 2026, a claimed and unrealised mark on assets the estate still holds.

Those are unrealised marks on private companies, published by the debtor, not proceeds from sales. Ripple, still private, is the largest line, so if its secondary price falls before the trust monetises, the recovery falls with it.

The recovery outcome by class

The plan confirmed on February 6, 2026 by Judge Alfredo R. Perez in the Southern District of Texas sorts the money as follows.

Customers chose, per claim, between two vehicles, and could split a percentage between them. The stated target is an estimated return of 95% of their securities or the value thereof (disclosure statement, solicitation version, December 12, 2025). The Liquidating Trust holds the Liquidshares assets not contributed to the fund, issues interests proportional to holdings and targets liquidation within five years; it was the default for anyone who made no election, and any liquidity is a secondary transfer at the customer’s own cost. The Closed-End Fund is a Delaware vehicle to be registered under the Investment Company Act and listed, with VanEck selected as manager on January 13, 2026.

Unsecured creditors, shareholders and customers holding deficiency claims, the part of a claim the two vehicles do not satisfy, recover only through a Wind-Down Trust that pursues claims and causes of action, including against former directors and officers (Orrick and Brown Rudnick, February 2026). There is no stated percentage for that class, because it depends entirely on litigation. Equity in Linqto, including Sarris’s own stake, sits behind all of it. Customers voted heavily in favour: more than 95% of those who cast ballots approved the plan.

The number that is not in the headline

The 95% is of current fair market value, not of what the customer paid. For someone who bought Circle in 2021 and watched it list at $31 and trade to $83.23, 95% of today’s value is a large multiple of cost. For someone who bought at a 200% markup into a name since marked down, it can be a fraction of the cheque they wrote. Both sit in the same class under the same headline. That is why the transaction dataset Linqto released on November 5, 2025 matters more to an individual customer than any press release: it is the only public record from which the markup on a particular purchase can be inferred.

This section establishes what exit existed, what replaced it, and what to expect on timing.

The exit while the platform ran, and how it ended

A 90-day holding period from the purchase date, then a sell order back to Linqto at Linqto’s price, minimum $5,000 or the whole position. That was the only route other than waiting for the company to list or be acquired, after which the shares typically carried a further lock-up of 90 to 180 days or more. It is what customers understood as liquidity and the most-cited grievance in the public complaint record. It stopped when the platform was paused in February 2025 and ended for good on March 13, 2025. From that date no customer could sell, redeem or withdraw; cash and positions were frozen together.

What replaces it

Two vehicles, neither of which was distributing as of September 18, 2026.

The Liquidating Trust issues non-traded interests with a five-year liquidation target, and any liquidity is a private secondary transfer the holder arranges and pays for. Expect a wide discount: a trust interest over minority stakes in private companies, with no redemption right and a five-year clock, is among the least liquid instruments an individual can hold.

The Closed-End Fund is intended to be exchange-listed once registered, giving daily liquidity at a market price. The warning comes from the comparable funds. Destiny Tech100 traded at roughly a 2,000% premium to net asset value in April 2024, and by mid-September 2026 changed hands near $31.20 against the $34.30 NAV it reported for June 30, 2026, a discount of about 9%. Robinhood Ventures Fund I listed on March 6, 2026 at $25.00 against a $24.70 NAV, touched $77.39 on May 13, 2026, sustained roughly 90% over its last published NAV through late May, then unwound to $24.81 by the end of July after SpaceX listed. A listed fund solves the ability to sell; it does not promise you NAV.

The trustee failure, and what it cost in time

This part is still live. Forge Global was selected as Liquidating Trustee on January 13, 2026, and Schwab completed its acquisition of Forge on March 2, 2026. On July 15, 2026, five days before the trust was to launch, Forge told the debtors it would not serve, citing unspecified regulatory or compliance concerns; Linqto says the instruction came from Schwab (Linqto statements, July and August 2026; Bloomberg Law, July 2026; InvestmentNews, August 2026). Linqto and the creditors’ committee sued to compel performance, and on August 10, 2026 Linqto said it was still pursuing Forge and Schwab for full monetary damages and legal fees. The effect: a plan confirmed in February 2026 had produced no distribution seven months later, and the delay came from the counterparty chosen to fix the problem.

What happens if the platform fails

It already did, and the answer is the point of the review. Because customers held units in improperly formed series rather than shares registered in their names, the securities became property of the bankruptcy estate, available in principle to satisfy the estate’s other obligations, including the DIP loan. That was the central fight. John Deaton objected to the DIP financing and sought a constructive trust, arguing the shares were held for identifiable investors and could not be pledged. Customers led by Linqto promoter Linda P. Jones later sought turnover of Circle shares under Section 542 as non-estate property; the motions were consolidated on March 27, 2026, heard on June 22, 2026 and denied on August 5, 2026, on the debtors’ account as improper and procedurally defective. The effect was to route every customer back through the plan.

Compare the structural opposite. A Hiive direct buyer goes on the issuer’s cap table and a Hiive failure does not touch the shares. Forge direct holders hold in their own names or at a custodian. An EquityZen buyer holds units of a numbered series that files its own Form D on EDGAR, registered on the cap table, with a FINRA-member broker-dealer in the chain and the company’s approval on the transfer. Those are the three checks Linqto’s structure failed.

This section establishes which forms a customer received, what the collapse does to the tax position, and the decision worth paying a professional for. Nothing here is tax advice.

While the platform ran

An investment in a series of Linqto Liquidshares LLC was a partnership interest for US tax purposes, so the expected annual form was a Schedule K-1 rather than a 1099. Customers in the wind-down have reported difficulty obtaining final K-1s, the normal experience with a bankrupt sponsor’s records. If you never received one, you generally still have a basis equal to what you paid, including the embedded markup, because you paid it. There is no collectibles issue here: the 28% rate under Section 1(h)(4) applies to art, wine, cars and metals, not to private company equity. Gains, when realised, are ordinary capital gains, long-term past one year.

The loss, and which section it falls under

Three routes exist and are not interchangeable.

Worthless securities, Section 165(g). Not available. The securities are not worthless; the estate’s own marks put customer-linked value at $1.3B in May 2026. Section 165(g) requires complete worthlessness, and partial worthlessness or a decline in value does not qualify.

Capital loss on disposition. The ordinary route. When you eventually dispose of your trust interest or fund shares, you compute gain or loss against your original cost basis. Capital losses offset capital gains without limit and then $3,000 of ordinary income a year under Section 1211(b), with the excess carried forward indefinitely.

Theft loss, Section 165(c)(2) and (e). This is the route that the September 3, 2026 indictment puts on the table. A loss from a transaction entered into for profit that arises from theft is deductible in the year of discovery, and Revenue Procedure 2009-20, issued after Madoff, provides an optional safe harbour for qualified investors in a specified fraudulent arrangement where a lead figure has been charged. Under the safe harbour a qualified investor may deduct 95% of the qualified investment in the discovery year if not pursuing third-party recovery, or 75% if pursuing it, less actual and potential recoveries including insurance. Revenue Ruling 2009-9 characterises the loss under Section 165(c)(2), which matters because that keeps it out of the miscellaneous itemised deductions that Section 67(g) disallowed and out of the Section 165(h) personal casualty limits.

The fit is not obvious. The safe harbour was written for Ponzi-type arrangements, in which the lead figure took money purportedly for investment and in fact misappropriated it. The Linqto indictment alleges something different: that real securities were bought and resold at undisclosed excessive markups. We found no authority applying Revenue Procedure 2009-20 to markup facts, so whether Linqto is a specified fraudulent arrangement is unverified at publication and a question for a CPA. If the safe harbour does apply, the 75% figure is the relevant one for almost every customer, because the plan itself is a third-party recovery.

What the recovery vehicles will send you

The Closed-End Fund, if it registers under the Investment Company Act and elects regulated investment company status, would issue a Form 1099-DIV and no K-1, the cleanest outcome for an individual and for an IRA. The Liquidating Trust will most likely be a grantor trust, issuing a grantor letter or a K-1 and passing through income annually whether or not it distributes cash, a nuisance in a taxable account. Neither treatment is confirmed in any document we could read, so both are unverified.

IRA and retirement accounts

If you bought through a self-directed IRA, you have no deduction at all. The loss sits inside the account: no theft loss, no capital loss, no basis adjustment. What matters is whether your custodian will hold the recovery vehicle, which is routine for a listed closed-end fund and, for a non-traded liquidating trust interest, requires acceptance and annual valuation. Ask before the election deadline, not after.

This section is the dated record. It is the reason the review exists.

The risk that actually ended the investor

Not the companies. Ripple, Circle and SpaceX all did well. What ended the Linqto investor was structure: a platform that was issuer, price-setter, custodian in fact and only market, whose legal plumbing was never properly built, so the customer’s asset was a claim against the platform, not a share of a company. Everything else here is downstream of that.

The regulatory record, dated

• October 2024: the SEC’s Division of Enforcement notifies Linqto of an investigation into securities law violations dating back to 2020.
• Late 2024: Ripple stops approving further Linqto secondary purchases of its shares.
• December 2024: FINRA examines Linqto Capital and refers the matter to FINRA Enforcement.
• January 2, 2025: Dan Siciliano becomes chief executive of Linqto, Inc.
• February 2025: the trading platform is paused while management sizes the problem.
• March 13, 2025: Linqto concludes it cannot resume operations and suspends the platform indefinitely; a release the next day announces a new executive team, the removal of prior executives and an internal investigation.
• April 3 and May 9, 2025: public updates on the investigations, and a statement that the underlying shares are secure.
• July 7 to 8, 2025: Chapter 11 petitions filed in the Southern District of Texas, Case No. 25-90186, for Linqto Texas LLC, Linqto Inc., Linqto Liquidshares LLC and Liquidshares Manager LLC; $500M to $1B of assets and liabilities; a DIP commitment of up to $60M from Sandton Capital Partners announced.
• August 2025: FINRA Enforcement is reported to be making inquiries into Linqto Capital, the non-debtor affiliate.
• October 6, 2025: final DIP order authorises $25M plus a $5M accordion at 14.50% PIK.
• November 12, 2025: general claims bar date, 5:00 p.m. Central; governmental bar date January 5, 2026.
• February 6, 2026: plan confirmed by Judge Alfredo R. Perez over objections from the founder and a shareholder group.
• August 27, 2026: Joseph Endoso pleads guilty before US District Judge Denise L. Cote in the Southern District of New York to securities fraud, broker-dealer fraud and conspiracy, and is cooperating.
• September 3, 2026: a six-count indictment against Bill Sarris, 75, of Monterey, California, is unsealed in the Southern District of New York: two counts of securities fraud, one of broker-dealer fraud and one of wire fraud, each carrying up to 20 years, and two conspiracy counts carrying up to five. Sarris is arrested and presented in the Northern District of California.

An indictment is an allegation. Sarris is presumed innocent, and we found no record of a plea by him as of September 18, 2026. The count structure above comes from reporting on an indictment our network could not open, so the statutory citations behind the six counts are unverified at publication. We found no SEC civil complaint against Linqto or Sarris on the public record, which may simply mean none has been filed yet.

The civil litigation

Maxwell v. Sarris, No. 1:25-cv-05643, a 61-page putative securities fraud class action brought by attorney John E. Deaton, was filed on July 9, 2025 in the Southern District of New York. It alleges undisclosed markups of 20% to 60% over Linqto’s acquisition cost, misleading waiver language and unlicensed sales of Ripple, Uphold and Kraken shares through SPVs, and alleges Sarris received internal legal memoranda in 2023 and 2024 warning the activity violated SEC and FINRA rules including acting as an unregistered broker-dealer and operating an unregistered investment company. It targets Sarris personally, so the bankruptcy stay does not shield it. Judge Lewis A. Kaplan appointed Scott+Scott and co-counsel as plaintiffs’ co-lead counsel; beyond that appointment we could not verify the case’s posture as of September 18, 2026.

Inside the bankruptcy, four contested matters decided customer outcomes: Deaton’s objection to the DIP loan and his request for a constructive trust over customer-linked shares; Sapien Group USA, LLC’s motion of July 16, 2025 to move venue to Delaware, arguing the Texas debtor was created on April 7, 2025 to manufacture venue and that the filing lacked shareholder consent, denied in August 2025; Sarris’s own plan objection seeking dismissal or an examiner, alongside a shareholder group’s competing plan; and the consolidated turnover motions led by Linda P. Jones, denied on August 5, 2026.

The complaint pattern

Treat all of this as unverified customer report. Linqto’s Trustpilot page carried a 1.9 out of 5 rating across about 40 reviews when we retrieved it in 2026, down from about 3.5 before the collapse, a small sample either way. Recurring themes: frozen positions, including in companies that had already listed, long selling restrictions, verification friction and deceptive marketing. Linqto was not BBB accredited, and the BBB complaint we could read is precisely on point: 90-day liquidity advertised, zero liquidity delivered.

One pattern shaped who bought. Linqto ran an affiliate programme that paid a commission on every referred member who invested, at rates it never published, and promoters with large retail followings marketed the platform directly, including Linda P. Jones, who later became a pro se litigant in the bankruptcy seeking the return of Circle shares. Paid referrals into an audience organised around a single token are not fraud by themselves. They are an efficient way to sell an opaque product to people who will not read the operating agreement.

The sector consequence

The SEC has since stepped up examinations of firms behind pre-IPO SPVs, asking registered advisers for proof that their vehicles actually own the shares they claim, with document requests, sometimes an in-person component, and examinations running from several weeks to a year (Reuters, 2026). Regulators moved after a rise in investor complaints and a marketing push ahead of the SpaceX IPO and Anthropic’s planned listing. The SEC’s pre-IPO investor alert names the exact mechanism Linqto used: promoters “may tell you that there are no upfront fees on pre-IPO offerings when they are actually charging you exorbitant, undisclosed markups”.

Linqto is available to nobody, so this section is about what the reader does with the record.

Read this and act on it if you are:

• A former Linqto customer deciding between the Liquidating Trust and the Closed-End Fund, or working out a 2026 tax position.
• An investor offered pre-IPO shares, tokens or SPV units by a platform that says it charges no fees. The fee is in the price, and this file is the arithmetic of what that costs.
• Someone about to buy a hot private name through a structure they cannot diagram. If you cannot draw the chain from your money to the issuer’s cap table on one page, including who holds the certificate and who approved the transfer, you are taking Linqto’s risk.
• Anyone whose exposure to one private company exceeds 10% of liquid net worth, which described many Linqto customers in Ripple.

Skip it and use a regulated alternative if you are:

• An accredited buyer who wants one named late-stage company through a broker-dealer route with a published commission: Forge, EquityZen or Hiive.
• A non-accredited investor who wants private-tech exposure, where the listed funds are the only legal route and the premium you pay is the only question.
• Anyone who wants diversified growth exposure rather than a specific logo, where an index fund at 0.20% a year beats every option here on cost, liquidity and tax, with no counterparty who can lose your title.

Every row below is a route a former Linqto customer can use today.

Which reader goes where. Accredited and after one specific private company: EquityZen at $5,000 and 2.5% a side is the cheapest published entry, Hiive at $25,000 has a live order book and a direct-transfer route that puts you on the cap table, Forge at $100,000 has a bank parent. Hiive’s direct transfer is the structurally safest of the three, for exactly the reason Linqto failed. Not accredited: the listed funds are your only legal route, and the discipline is buy only at or below the last published NAV, because DXYZ at a 2,000% premium in April 2024 and RVI at $77.39 against a $24.70 NAV show what the wrapper can do to you. After exposure to fast-growing technology rather than a particular logo: the index fund wins on cost, liquidity and tax, and cannot lose your title.

There is no Linqto account to open. Here is the practical sequence for a former customer, then the six checks that would have caught Linqto on any platform.

What to do if you held Linqto units

1. Confirm your claim is on file. The general bar date was November 12, 2025 at 5:00 p.m. Central, with claims filed through Epiq in Case No. 25-90186. If you did not file, take legal advice now; late claims in a confirmed case are difficult and sometimes impossible.
2. Understand your election. Customers chose between interests in the Liquidating Trust and shares of the Closed-End Fund, or a percentage split. The trust was the default for anyone who made no affirmative election. If you did not vote, check which vehicle you are in.
3. Expect contact from VanEck, the trustee, or both after the effective date, which had not arrived by September 18, 2026 because Forge withdrew as Liquidating Trustee on July 15, 2026 and the replacement was unresolved. Watch the docket, not the press releases.
4. Do not pay anyone to recover your money. Recovery agents and claim buyers cluster around confirmed plans. The estate’s professionals administer your claim and you need not buy access to it.
5. Pull your transaction history. Linqto published a complete transaction dataset on November 5, 2025, covering 2020 to 2025 with names and IDs removed. With your own confirmations, it is the best evidence of what you paid against what comparable lots cost.
6. Decide your tax position before you file. The choice between a capital loss on disposition and a theft loss under Section 165(c)(2) turns on your own facts and on the criminal case. Worth a professional’s fee.
7. Watch three dockets: the Chapter 11 case in the Southern District of Texas, the Linqto action against Forge and Schwab, and United States v. Sarris, where restitution can be a separate source of recovery.

The six things to read before wiring money to any pre-IPO platform

1. The document that names what you will own. A share certificate or cap table entry in your name, or units of a named LLC series. If it is the second, pull the series’ own Form D from EDGAR before you wire. A series that exists as a filing exists.
2. The issuer’s consent. Ask in writing whether the company has approved the transfer, and what happens to your money if a right of first refusal is exercised. Linqto’s inventory included shares whose issuer had stopped approving its buying.
3. Who holds the security, and where. Name the custodian or transfer agent. “The platform holds it” is the Linqto answer.
4. The price against the last arm’s-length trade. Ask for the acquisition price and date of the specific lot. A markup at or above 5% puts a regulated broker on the wrong side of FINRA’s presumption of unfairness, and an undisclosed spread above 10% is the level the Sarris indictment says the founder knew was unlawful.
5. The regulated entity in the chain. Look up the broker-dealer on FINRA BrokerCheck and the adviser on the SEC’s IAPD by CRD number and read the disclosure events. Linqto Capital was CRD 314557 and was referred to FINRA Enforcement in December 2024.
6. The exit, in the contract rather than the marketing. If the platform promises to buy your position back, find the clause, find who funds it, and ask what happens if the platform stops. Linqto’s 90-day redemption was a promise, not a market, and it ended when the company did.

Linqto is the cleanest case study in this market of a risk that is almost never priced: the risk that you do not own what you bought. The companies were fine. Ripple, Circle and SpaceX all appreciated, and the estate says the customer-linked portfolio rose from $657M in June 2025 to $1.3B in May 2026. Had Linqto been a mediocre platform holding good assets, its customers would be rich. Instead they spent fourteen months as unsecured creditors, arguing in a Texas courtroom over whether the shares on their statements were their property or the estate’s, and they lost on August 5, 2026.

What made it possible fits in a sentence: be the issuer, the counterparty, the price-setter, the custodian and the only market, and tell the customer there are no fees. Each element is legal alone. Together, with no regulated broker in the chain and no disclosed spread, they produced a median markup of about 60% on more than $450M, on the government’s allegation of September 3, 2026, and a set of series LLCs a Delaware lawyer could unwind in an afternoon.

We rate Linqto 1 out of 5. That is not a comment on whether customers will be made whole; the plan targets 95% of current fair market value and may come close for those who bought the names that went up. It is a comment on what the platform was: a product whose entire cost was hidden, whose legal structure did not do what the marketing said, and whose promised liquidity was a company’s discretion dressed as a market.

The rating does not change. Six things would change our reading of the outcome: the plan’s effective date and the identity of the replacement Liquidating Trustee, unresolved as of September 18, 2026; the first actual distribution and its realised percentage against cost rather than fair market value; the closed-end fund’s N-2 registration statement, which carries the fee table and tells you what VanEck charges the customers of a fraud to hold their own assets; the fund’s listing price against its first published NAV, where a second loss can occur; Ripple’s next secondary print or tender price, since the largest asset behind every recovery is still a private company; and the progress of United States v. Sarris, including any restitution order. An SEC civil action would be a seventh; as of September 18, 2026 we could find none on the public record.

The transferable lesson is short. The fee you cannot see is the largest one. The structure you cannot diagram is the one that fails. The question to ask a private-markets platform is never “what has it returned”; it is “what will I own, who holds it, and who approved the transfer”. Nothing here is investment advice; it is research, dated September 18, 2026, and you should read the documents named above before you wire money to anyone.