Ziglu’s 2 million pound deficit leads to special administration, 4,000 customers face losses

Ziglu, a British cryptocurrency fintech, has been placed into special administration following the discovery of a 2 million pounds ($2.7 million) deficit. The company, which suspended withdrawals in May, has left thousands of savers facing the prospect of losing their investments. Ziglu attracted around 20,000 customers with promises of high-interest returns, particularly through its “Boost” product, which offered yields up to 6%. Launched in 2021 during a period of low interest rates, Boost became popular due to its higher returns. However, the product was not protected or ring-fenced, allowing the company to use customer funds for day-to-day operations and lending activities. Following the Financial Conduct Authority’s (FCA) intervention in May, withdrawals were frozen, leaving savers locked out of their money for weeks.

At a recent High Court insolvency hearing, directors were accused of mismanaging funds, with evidence suggesting that money from Boost savers was diverted to cover general cash flow issues before the company applied for special administration in June. The report said that around 4,000 customers had their Boost investments frozen, totaling approximately $3.6 million. With the $2.7 million shortfall, the majority of these funds could be lost unless recovered through a rescue or sale deal.

Ziglu, founded by former Starling Bank co-founder Mark Hipperson, described its mission as “empowering everyone to benefit from the new world of digital money, easily, safely and affordably”. The company was once valued at $170 million and attracted a deal with a US fintech giant in 2022, which later fell through amid crypto market turmoil. Ziglu’s administrators will now seek buyers for the company.

The UK’s unclear stance on digital asset regulation is drawing criticism from industry experts, who blame “policy procrastination” for the country falling behind the European Union and the US. Unlike the EU’s Markets in Crypto-Assets (MiCA) framework and the US Senate’s recent passage of the GENIUS Act, which provide clear guidelines for crypto and stablecoins, the UK’s FCA still lacks a confirmed launch date for its crypto regime.