Carta has closed its platform for secondary trading in startup shares – Kommersant
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American technology company Carta was forced to close its platform for secondary trading of startup shares after it was suspected of defrauding customers, reports Financial Times.
Carta helps tech startups track their investors. However, over the weekend, one of the company’s clients, startup Linear, accused Carta of pushing investors to sell Linear shares on the secondary market.
Linear co-founder Karri Saarinen suggested that Carta could only identify the startup’s investors using confidential information provided by his company to help manage its investor base. This information is not intended to be used by Carta’s stock trading business. But Mr. Saarinen suggested that this is exactly what happened.
“Since we have data and we trade derivatives, people will always worry that we are using data, even if we are not. Therefore, we decided to prioritize customer trust and exit the secondary trading business,” said Carta CEO Henry Ward.
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