Crypto-Friendly Bank Ziglu Enters Administration After FCA Restrictions

UK-based crypto-friendly bank Ziglu has entered into special administration, marking a potential financial collapse. The bank, which is authorized to issue electronic money and provide payment services, has faced significant challenges leading to this outcome. David Shambrook and Damian Webb from RSM Restructuring Advisory LLP have been appointed as special administrators to manage Ziglu's affairs, business, and property for the benefit of its creditors.

Ziglu's activities include offering cryptocurrency products, such as lending services, which are not regulated by the Financial Conduct Authority (FCA). However, the FCA is responsible for overseeing Ziglu's compliance with anti-money laundering regulations. On May 23, 2025, the FCA took action to protect consumers by placing restrictions on specific products offered by Ziglu. Subsequently, on June 17, Ziglu agreed to cease its payment and cryptocurrency activities but allowed customers to withdraw their funds.

The entry of Ziglu into administration serves as a stark reminder of the financial risks inherent in the cryptocurrency market. The bank's collapse underscores the need for robust risk management and regulatory oversight within the cryptocurrency industry. The administration process will involve a comprehensive examination of Ziglu's financial situation, including its assets, liabilities, and potential recovery options. The administrators will aim to maximize the value of Ziglu's assets for the benefit of its creditors, which may include depositors, investors, and other stakeholders.

The administration of Ziglu is likely to have broader implications for the cryptocurrency industry. Other financial institutions operating in this space may face increased scrutiny and regulatory pressure as a result of Ziglu's collapse. The administration process will provide valuable insights into the financial health of the cryptocurrency industry and the risks associated with investing in this market. The administrators will ensure that Ziglu's assets are managed transparently and accountably, protecting the interests of all stakeholders.

This development highlights the volatility and risks associated with the cryptocurrency industry, as well as the challenges faced by financial institutions operating within this space. The administration of Ziglu underscores the importance of transparent and accountable operations for financial institutions in the cryptocurrency market. The process will involve a thorough examination of Ziglu's financial situation, with the administrators working to maximize the value of the bank's assets for the benefit of its creditors. The broader implications for the cryptocurrency industry are significant, emphasizing the need for robust risk management and regulatory oversight.