Ziglu Just Collapsed With a £2.7M Deficit—Is Your Crypto Account Next?

In the fast-moving and often unpredictable world of cryptocurrency, where new technology often advances faster than regulations, the collapse of Ziglu, a once-promising British crypto fintech, has sent shockwaves through the industry. As of July 14, 2025, the company has gone into special administration after revealing a huge £2.7 million shortfall in user funds. This situation leaves about 20,000 customers unsure about what will happen to their digital assets.

So, what exactly went wrong? Why does it matter beyond Ziglu’s user base? And most importantly, what lessons should everyday crypto users learn from this? This deep dive explores Ziglu’s downfall, shedding light on the risks of new crypto platforms and why understanding this story is important for anyone involved in digital assets.

The Rise and Fall of Ziglu

Ziglu was launched in 2021 by Mark Hipperson, a co-founder of Starling Bank, with the goal of creating a simple, user-friendly digital platform for buying, selling, and storing cryptocurrencies. The fintech quickly gained traction and, at its peak, was valued at around £126 million, attracting roughly 20,000 customers. One of its standout features was the “Boost” product, which offered users up to 6% interest on their crypto savings an enticing proposition at the time.

However, things took a sharp downturn. As Ziglu’s financial health deteriorated, administrators uncovered a troubling £2 million shortfall about $2.7 million in customer funds. This gap in the company’s finances ultimately triggered its collapse, leaving users anxious and uncertain about the fate of their crypto holdings.

What Caused Ziglu’s Collapse?

Ziglu’s downfall unfolded rapidly in 2025. On July 7, the company entered special administration, with David Shambrook and Damian Webb from RSM Restructuring Advisory LLP stepping in as administrators . Before that, on May 23, the FCA restricted Ziglu’s operations halting electronic money issuance and crypto custody due to concerns over AML compliance and consumer protection.

This followed Ziglu’s suspension of withdrawals in May, freezing user funds for weeks . Administrators later found Ziglu had been using customer funds for daily expenses and loans, which caused a £2.7 million shortfall . Total losses, including those from the Celsius Network bankruptcy, may exceed £24 million . Users, especially those in the unprotected “Boost” product, face potential losses, with no clear recovery timeline as the company seeks a buyer .

Why Did Ziglu Collapse? Key Causes Explained

Ziglu’s downfall was driven by a combination of poor management decisions, weak regulatory oversight, and challenging market conditions. One of the most critical missteps was using customer funds to cover operational expenses—a clear violation of financial best practices. While similar issues have surfaced in parts of the crypto industry before, this case underscores the urgent need for stronger oversight, particularly in the UK, where crypto regulation is still evolving.

The FCA’s intervention in May 2025, though necessary, came too late to prevent losses for many users. This delay highlights just how crucial timely and robust consumer protection rules are. Ziglu was also hit hard by market volatility. Their high-interest “Boost” product, which lacked proper safeguards, left users exposed during downturns. Adding to the pressure, the collapse of a proposed acquisition by Robinhood further limited Ziglu’s options for recovery.

Could Other Crypto Platforms Be at Risk Like Ziglu?

The collapse of Ziglu has raised an important question for crypto investors: Could this happen to other platforms? The answer is complicated. On one hand, major platforms like Coinbase, Binance, and Kraken are seen as safer choices. They have strong financial backing, follow established regulations, and prioritize user protection with measures like cold storage and insurance. With oversight from regulators like the FCA and increased transparency, a failure like Ziglu’s is less likely.

However, not all platforms meet these standards. Smaller or less regulated exchanges, especially those operating in legal gray areas, may be more at risk. Some still use customer funds for daily operations, which is risky, particularly in regions where crypto laws are still developing, such as parts of Europe and Asia.

So what should investors do? Conduct thorough research. Before trusting any platform, check its financial health, regulatory compliance, and security measures. Choose services that are transparent, offer strong user protections, and are properly regulated. Also, don’t put all your digital assets in one place; diversify across reputable platforms. And importantly, stay updated on changing crypto regulations, as they can greatly affect platform safety and market dynamics.

A Wake-Up Call for the Crypto Industry

Ziglu’s downfall marked by a £2.7 million shortfall in July 2025 serves as a stark reminder of the risks in the crypto world, especially on platforms with poor financial management and weak oversight. It highlights the growing pains of an industry full of innovation but still lacking consistent global standards. With the FCA stepping in and the company entering administration, Ziglu has become a cautionary tale and a warning for what could happen elsewhere. Whether your crypto account is safe depends heavily on the platform you use and how responsibly it’s run.

FAQs

1. 1. What caused Ziglu’s collapse with a £2.7M deficit?
      Ziglu collapsed due to mismanagement, using customer funds for operations, and losses from the Celsius Network bankruptcy, leading to a £2.7M shortfall
   2. How many users are affected by Ziglu’s collapse?
      Approximately 20,000 Ziglu users, particularly those with “Boost” accounts, face potential losses, with funds frozen since May 2025.
   3. Is my crypto account at risk after Ziglu’s collapse?
      Well-regulated platforms like Coinbase or Binance are likely safer, but smaller platforms with poor practices could be vulnerable, so research is key.
   4. What is being done to address Ziglu’s shortfall?
      Administrators from RSM are assessing Ziglu’s finances and seeking buyers, but recovery for users remains uncertain.
   5. How can I protect my crypto investments?
      Use regulated platforms, check financial transparency, diversify across exchanges, and stay updated via CoinMarketCap and CoinGecko for Ziglu-like risks.