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British Crypto Fintech Ziglu Admits £2m Shortfall Leaving Thousands of Savers Potentially Unscathed

Savers face significant losses as administrators at the collapsed British crypto fintech Ziglu have disclosed a £2 million shortfall following its placement into special administration earlier this year.

Ziglu, which suspended customer withdrawals in May, was placed under special administration last week due to concerns over its financial management, reported The Telegraph.

Attracted by its popular “Boost” product offering yields up to 6%, Ziglu claimed around 20,000 customers. This was launched in 2021 during low interest rates. However, the product was not protected, meaning customer funds were used by the company for daily operations and lending.

After FCA intervention in May froze withdrawals, directors faced accusations at an insolvency hearing. They were alleged to have diverted funds from Boost accounts before seeking special administration in June, overriding standard procedures.

Roughly 4,000 Boost customers had their investments frozen, totalling approximately £3.6 million ($2.7 million). Facing this deficit, savers are now concerned funds could be permanently lost unless recovered in a rescue or sale to a new owner.

Allegations Against Ziglu Directors and Fading Ambitions

Ziglu, founded by former Starling Bank co-founder Mark Hipperson, once valued at £170 million and courted by Robinhood, was led into special administration by RSM.

Mark Hipperson described the company’s mission as “empowering everyone to benefit from the new world of digital money”. The administrators are now seeking a buyer.

Meanwhile, former directors face scrutiny for alleged misuse of vulnerable customer funds following a process allegedly circumventing standard procedures put in place by regulators.

UK Crypto Regulatory Landscape Under Fire

The UK’s regulatory approach to digital assets is drawing sharp criticism. Experts accuse the country of falling behind the EU and the US due to delays in establishing clear crypto regulations.

This criticism highlights the UK’s lag in providing a defined structure for crypto activities, contrasting with frameworks like the EU’s MiCA and US Senate’s GENIUS Act.