Latest news with #MarkHipperson
Telegraph
3 days ago
- Business
- Telegraph
Millions in savers' cash goes missing after crypto company collapses
Thousands of savers face losing their investments after a shortfall worth millions of pounds was discovered at a collapsed cryptocurrency company. Administrators have discovered a £2m black hole at Ziglu, a British fintech business that suspended withdrawals in May and was put into special administration last week. The company attracted savers with promises of market-beating interest rates and was once valued at £126m. But many of its 20,000 customers have had their funds frozen for weeks after the Financial Conduct Authority (FCA) forced it to suspend withdrawals. Directors at the company were last week accused of 'mismanagement' as a court heard that they had used savers' funds to keep the business running until it collapsed. A High Court insolvency hearing was told that funds saved in Ziglu's high-interest investment product had been 'used in relation to more general cashflow' before the company applied to be put into special administration in June. Customers' funds have been frozen since May, when the FCA restricted withdrawals related to its Boost product, which offered market-beating interest rates. The collapse is likely to raise new questions about the high-stakes cryptocurrency industry, which has dangled the promise of huge returns without traditional protections. 'New world of digital money' Ziglu, founded by the former Starling Bank co-founder Mark Hipperson, allowed users to store and send cryptocurrency. It described its mission as 'empowering everyone to benefit from the new world of digital money, easily, safely and affordably'. The company's key feature was a 'Boost' investment product that offered returns of up to 6pc. It was launched in 2021, when interest rates were at historic lows, and attracted savers who were desperate for returns. Ziglu suspended users from withdrawing Boost funds in May. Around 4,000 savers used the investment product, with total balances of £2.7m. The £2m shortfall means that the majority of their funds will be wiped out if they are not recovered as part of a rescue deal. Millions of pounds in separate customer deposits and cryptocurrency holdings are believed to be accounted for, although it is unclear when customers will be able to retrieve them. In June customers were given a week to withdraw these funds before the business applied to go into administration. The Boost product was not protected or ring-fenced like typical savings accounts. Its terms allowed the company to use the funds for day-to-day spending and generate returns by lending it out. The company is alleged to have dipped into the customer funds earlier this year when an investment deal fell through. Mr Hipperson, who is no longer at the company, said that Ziglu's board and advisers had been close to securing new funding in the weeks leading up to restrictions being placed on the company and that the investment would have ensured that Boost savers were made whole. Ziglu's administrators at RSM will now seek buyers for the company with the future of savers' funds unclear. The company was formally placed into special administration on Monday, after an unsuccessful legal challenge from a secured creditor who had sought to appoint Kroll, a different administrator. Reuben Comiskey, representing the creditor, FactorTech Funding, said there 'appears to have been mismanagement and misapplication of funds' and that 'we have real concerns about the way the directors operated this company'. Mr Hipperson said this was 'completely false' and claimed that it was 'a misguided attempt' to take control of the administration. Accordingly, the judge denied their application in favour of RSM. The US fintech company Robinhood agreed to pay $170m (£126m) for Ziglu in 2022 as part of a plan to enter the UK, but attempted to cut the price amid a major downturn in crypto markets and later pulled out of the deal. An FCA spokesman said: 'We cannot comment on specific firms. We continue to remind people that while we develop the UK's crypto regulation, crypto remains largely unregulated in the UK and high risk.' The company has been bombarded with one-star reviews by customers unable to access their funds. Administrators at RSM must contact customers within eight weeks with details of their proposals for the business, which will include how funds will be returned.
Finextra
7 days ago
- Business
- Finextra
Ziglu enters administration
Ziglu, the crypto startup launched by former Starling co-founder Mark Hipperson, has entered administration. 0 The UK-based cryptocurrency business once commanded a $170 million price tag, but has been plagued by cash-flow problems as investors cooled on fintech prospects during the 2023 tech downturn. It last raised raised £5 million in February at a £45 million valuation and signed a £10 million term sheet to fund the launch of its own stablecoin. However, in May, the FCA took action to protect consumers, by placing restrictions on Ziglu in relation to particular products. On 17 June, Ziglu agreed to stop carrying out both payments and cryptoasset activities while allowing customers to withdraw funds. The FCA has since rescinded its authorisation of Ziglu as an e-money instituion. David Shambrook and Damian Webb of RSM Restructuring Advisory LLP have been appointed as special administrators.
Daily Mail
18-06-2025
- Business
- Daily Mail
EXCLUSIVE Crypto firm Ziglu stops trading and tells customers to withdraw funds immediately
Customers who invested their cash with platform Ziglu have been told to withdraw their funds immediately, after the FCA said it had to cease trading, This Is Money can reveal. Ziglu said it had signed a 'voluntary undertaking' with the Financial Conduct Authority, which means it will have to stop all regulated activity and registered businesses. It will not be able to issue electronic money, or act as a cryptoasset exchange provider or custodian wallet provider. In an email seen by This Is Money, Ziglu told customers that they would not need to 'withdraw all funds from the platform immediately and no later than 25 June 2025.' It also means that Ziglu cannot accept the deposit of any new funds and is unable to provide the purchase of any additional crypto assets. Mark Hipperson, chief executive, told customers: 'Crypto assets can be converted to a fiat asset and withdrawn, and if fiat funds are held in a different currency to the one required to enable you to withdraw your funds you can exchange the currency to enable you to withdraw. 'Our customer support teams are available to assist with any inquiries, concerns, or issues you may have in respect of the cessation of activities. 'You can reach us through our regular customer service channels, which remain fully operational. 'Our online and mobile platforms will remain open until 25 June 2025 and we strongly encourage you to log in, withdraw your funds and download statements that you may require before the expiry of that deadline.' This Is Money previously revealed customers who invested their cash in Ziglu's 'Boost' accounts had their accounts frozen on 16 May and a week later, said it would be closing the products. The accounts allow customers to invest cryptoassets (both stablecoins and crypto) to generate a yield. Ziglu partners with lending platforms that lend the coin to institutional investors like hedge funds. The platform froze its Boost accounts on 16 May and informed its customers on 23 May that it would be closing the products. These products remain frozen, according to the platform's latest update. While Ziglu is regulated by the FCA, Boost accounts are not and are not subject to the same safeguarding as any funds held in their cash accounts. Customers are not protected by the Financial Services Compensation Scheme or Financial Ombudsman Service. This latest update comes just months after Ziglu announced it had raised £5million earlier this year, with plans to introduce 'Ziglu Coin'. Ziglu and the FCA did not respond to requests for comment.
