British cryptocurrency startup, Ziglu, has entered special administration following the discovery of a £2 million shortfall in customer funds, potentially leaving thousands of savers facing significant losses. The company, founded by former Starling Bank co-founder Mark Hipperson, suspended customer withdrawals in May before formally entering administration on 7th July 2025.
David Shambrook and Damian Webb of RSM Restructuring Advisory LLP have been appointed as special administrators, with responsibility for managing customer claims and attempting to return funds to affected users.
Regulatory Intervention and Suspension of Operations
The Financial Conduct Authority (FCA) first took action to protect consumers on 23 May 2025, placing restrictions on Ziglu in relation to particular products. On 17th June, Ziglu agreed to stop carrying out both payments and cryptoasset activities while allowing customers to withdraw funds.
However, on 26th June 2025, the directors of Ziglu applied to court to place it into special administration because they concluded that the firm was insolvent.
The Boost Product and Customer Impact
Central to Ziglu’s difficulties was its “Boost” product, which was launched in 2021 during a period of low interest rates and offered yields up to 6%. The product attracted significant customer interest, with around 20,000 customers using Ziglu’s platform.
However, the product was not protected or ring-fenced, allowing the company to use customer funds for day-to-day operations and lending activities.
According to court documents, around 4,000 customers had their Boost investments frozen, amounting to roughly £2.7 million.
At a recent insolvency hearing, the company used customers’ Boost savings to fund day-to-day operations, departing from the intended use of those assets. This practice has raised serious concerns about fund management and customer protection in the crypto sector.
Company Background and Failed Acquisition
Ziglu was once a high-profile fintech success story. The UK-based cryptocurrency business once commanded a $170 million price tag when US fintech giant Robinhood agreed to acquire the company in 2022. However, the deal later fell through amid crypto market turmoil.
Despite appearing to recover, with founder Mark Hipperson stating in March 2024 that Ziglu was “stronger and better equipped than ever” following the failed acquisition, the company’s financial position continued to deteriorate. The company incurred losses exceeding £4 million in 2023 alone, following losses of £15.8 million in 2022.
As recently as February 2025, the fintech unveiled a new cryptocurrency, the ‘Ziglu Coin’, backed by a $10 million investment, and launched a £5 million Series A fundraise at a £45 million valuation.
Customer Recovery Prospects
The special administrators face the challenging task of attempting to recover customer funds. Customers should receive more information from them, including details on how to make a claim, within 8 weeks of appointment.
However, the outlook appears concerning. With the $2.7 million shortfall, the majority of these funds could be lost unless recovered through a rescue or sale deal.
Customers have been advised to contact the special administrators at RSM Restructuring LLP, whilst being warned to remain alert to potential scams during the administration process.
Regulatory Implications
The collapse has highlighted broader regulatory challenges facing the crypto sector in the UK. 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.
The FCA has consistently warned that crypto investments carry significant risks and remain largely unregulated, with investors potentially facing total loss of their investments.
Looking ahead, the Ziglu case is likely to intensify calls for clearer regulatory frameworks governing crypto products that blur the lines between traditional financial services and digital assets, particularly those offering high-yield returns to retail customers.
