The collapse of UK-based fintech firm Ziglu has uncovered a £2 million financial shortfall impacting 20,000 customers, spotlighting significant risks in cryptocurrency savings products lacking regulatory protection.
Approximately 4,000 investors in Ziglu’s ‘Boost’ savings program saw $3.6 million improperly diverted from their accounts, according to revelations during a High Court insolvency hearing. The product had promoted yields of up to 6% but ultimately left customers exposed to substantial losses.
Ziglu, once valued at nearly $170 million, previously attracted acquisition interest from trading platform Robinhood before succumbing to financial instability amid broader cryptocurrency market turbulence.
The incident underscores the UK’s lagging regulatory framework for digital assets compared to global counterparts like the EU’s MiCA legislation and the US’s GENIUS Act. Industry analysts note the absence of comprehensive guidelines for crypto stability and consumer safeguards in British jurisdiction.
This failure accentuates the urgent need for enhanced UK cryptocurrency regulations that balance technological innovation with robust investor protections to prevent similar systemic vulnerabilities.