Linqto Freezes Accounts: John Deaton Warns Investors Could Lose $120K+ in Profits

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Hassan Shittu

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Hassan Shittu

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Hassan, a Cryptonews.com journalist with 6+ years of experience in Web3 journalism, brings deep knowledge across Crypto, Web3 Gaming, NFTs, and Play-to-Earn sectors. His work has appeared in...

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Last updated: 

June 30, 2025

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Prominent XRP advocate and attorney, John Deaton, has raised serious concerns over Linqto’s proposed refund strategies following the platform’s abrupt account freezes earlier this year.

Deaton warned that investors may lose substantial profits if Linqto returns only the original investment amounts, disregarding the earnings from successful pre-IPO assets like Circle and Ripple.

Linqto Refund Plans Would Not Favor Investors

In his X post, Deaton emphasized the danger of such a move. He revealed that his $30,000 investment in Circle through Linqto had appreciated to $157,000.

This indicates a potential $120,000 loss if he were refunded solely his initial capital. “That growth doesn’t belong to Linqto, it belongs to the investor,” Deaton asserted.

For context, Linqto users were blindsided when the platform froze customer accounts and ceased operations on February 27, according to Globenews. Additionally, many Linqto users expressed frustration over a new KYC process.

Yet, Linqto has remained mostly silent on social media, with its last post in January 2025. Instead, the company has sent emails confirming leadership changes, including Dan Siciliano’s appointment as CEO and the removal or termination of several senior executives.

This shake-up follows a lawsuit from former CRO Gene Zawroty accusing Linqto of market manipulation and fraud. Linqto seems focused on fixing internal problems before addressing user complaints.

The silence and lack of clear communication resulted in fears across the user base, particularly among investors holding valuable shares in companies like Ripple, which reportedly offered a buyback at $175 per share in June, well above many investors’ entry price.

Deaton has made it clear he won’t support any resolution that sees Linqto profiting from gains made using user capital. “I didn’t put my money in so Linqto could walk away with the profits,” he said.

Failed Ventures Deserve Refunds, Profitable Ones Deserve Payouts

While acknowledging the frustration among affected investors, Deaton drew a distinction between failed projects and successful ones.

He pointed to Polysign as an example of a failed investment, where a refund might make sense. However, lumping in profitable ventures like Circle and Ripple under the same refund umbrella would be deceptive, he argued.

Deaton also warned users to be cautious of opportunists looking to exploit emotionally distressed investors.

“Don’t sell out of fear,” he urged, encouraging careful evaluation before accepting any buyout or refund offer that undervalues their current holdings.

Adding fuel to the growing tension, Deaton hinted that a major report exposing Linqto’s internal practices is set to drop soon. He described the situation as a “clusterfuck,” further stoking speculation about mismanagement or worse.

According to Rob Cunningham, founder of the advocacy group “Free Linqto,” investors suspect that the platform’s reserves may have been mishandled, contributing to the operational freeze.

The company, once praised for giving retail investors access to high-profile pre-IPO equity, including a notable 3% stake in Ripple Labs is now facing intense scrutiny from more than 14,000 users seeking answers.

Also, John Deaton had earlier criticized Linqto for its ongoing silence amid user complaints about frozen accounts and repeated KYC demands.

In an April post on X, Deaton revealed he’s received numerous messages from frustrated customers and scheduled a Zoom meeting for March 27 at 6 p.m. EST to discuss possible next steps.

He hinted at a potential class action lawsuit, noting many affected users had previously joined him in the SEC vs. Ripple case.