Ziglu Collapse Uncovers Risks Behind Crypto Fund Mismanagement

High-Yield Hopes End in Financial Turmoil

The downfall of Ziglu, a UK-based crypto fintech, has sent shockwaves through the digital asset industry. Over 20,000 users now face financial uncertainty.

Ziglu once promised financial freedom with its flagship product “Boost,” which offered up to 6% interest. Behind that promise, however, lay unstable fund practices.

Founded by Mark Hipperson, co-founder of Starling Bank, Ziglu was poised to modernize crypto access. But its high-risk structure proved its undoing.

Funds Meant for Savings Used for Operations

In 2021, Ziglu launched Boost, attracting users with enticing returns. However, the firm allegedly used those funds to support daily operations instead.

Recent court documents reveal a troubling shortfall. Of £2.7 million in Boost balances, £2 million is missing—directly affecting nearly 4,000 customers.

Administrators now say user funds were not properly separated. The FCA’s late intervention left users without access or protection for their assets.

Special Administration and Regulatory Scrutiny

In June 2024, Ziglu entered special administration following a ban on Boost withdrawals. The FCA stepped in after recognizing liquidity and governance risks.

Unlike traditional savings accounts, Boost had no government protection. Its terms reportedly allowed internal fund use, but many users were unaware.

Thousands are left wondering if they’ll recover their deposits. With no timeline from administrators, many may never see their funds again.

No Buyer, No Backup Plan

Adding to the chaos, Ziglu gave users just one week in June to withdraw funds. But by then, Boost accounts were already frozen.

Efforts to rescue the platform fell through. A 2022 acquisition offer by Robinhood—initially valued at $170 million—collapsed after crypto market volatility.

The loss of that deal left Ziglu exposed. Despite efforts to secure alternate funding, nothing materialized before the FCA’s clampdown.

The Fall

Ziglu’s fall is a reminder of fintech fragility in an underregulated sector. What looked like modern banking innovation was, in fact, a liquidity timebomb.

Its founder, Mark Hipperson, exited earlier this year. He had claimed new funding was close—but it came too late for Ziglu or its users.

Without regulatory clarity or investor trust, the company’s collapse was almost inevitable. It is now under review, with assets frozen and liabilities unresolved.

Crypto Products Still Outpace Oversight

Ziglu’s story underscores a bigger issue: a regulatory gap in crypto finance. Platforms mimicking banks must still meet the same accountability standards.

Many crypto users, lured by high returns, fail to understand the lack of security. When platforms collapse, there is no safety net.

As regulators play catch-up, fintechs continue testing boundaries. The difference between high-yield innovation and fund mismanagement is often buried in the fine print.

What’s Next for UK Crypto?

The UK government aims to become a global crypto hub. But Ziglu’s failure proves that ambition must be matched with strong safeguards.

Without stricter oversight, more fintech collapses are likely. Boost’s failure shows how quickly things can unravel when user trust is exploited.

For now, investors are watching closely. And regulators are under pressure to act—before the next Ziglu happens.

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