Thousands of UK savers are at risk of losing their investments after a $2.7 million shortfall was discovered at Ziglu, a British cryptocurrency fintech now under special administration. The collapse raises serious questions about crypto regulation and the safeguarding of investor funds.
Ziglu Suspends Withdrawals, Freezes Customer Funds
Ziglu entered administration after suspending withdrawals in May 2025. The platform, which had attracted around 20,000 customers, marketed its “Boost” product as a high-yield investment tool, offering returns of up to 6% during a period of low interest rates.
However, the product was not ring-fenced or protected, meaning customer deposits were used to fund daily operations and lending activities. This structure became unsustainable when liquidity dried up and the UK Financial Conduct Authority (FCA) intervened, freezing client access to funds.
Approximately 4,000 customers had their Boost investments locked, totaling around $3.6 million, according to recent court filings.
https://cointelegraph.com/news/ziglu-crypto-collapse-2-7m-shortfall-savers-risk-loss
Directors Accused of Financial Mismanagement
At a High Court insolvency hearing, Ziglu’s directors were accused of misusing customer funds. Evidence suggests that investor capital was diverted to support the firm’s general cash flow, especially in the weeks leading up to the company’s application for special administration.
The $2.7 million shortfall uncovered by administrators could result in significant customer losses, unless funds can be recovered through a company rescue or asset sale.
Ziglu was previously seen as a rising player in UK fintech. Founded by Mark Hipperson, a former Starling Bank co-founder, the company was once valued at $170 million. In 2022, a deal with U.S. fintech giant Robinhood was announced but later collapsed during broader crypto market turbulence.
UK Crypto Regulation Lags Behind
Ziglu’s downfall has reignited criticism of the UK’s delayed digital asset regulation. Unlike the EU’s MiCA framework or the GENIUS Act passed in the US Senate, the UK still lacks a clear timeline for crypto-specific rules.
Industry experts argue that regulatory uncertainty is harming investor confidence and contributing to riskier behaviors by firms operating in the digital asset space.
What Happens Next?
Ziglu’s administrators, RSM, are actively seeking buyers for the company. Meanwhile, customers await clarity on whether their investments can be recovered. The case has become a wake-up call for stronger consumer protection and clearer regulatory frameworks in the UK crypto industry.
Disclaimer
This content is for informational purposes only and does not constitute financial, investment, or legal advice. Cryptocurrency trading involves risk and may result in financial loss.