Collapsed British crypto firm Ziglu is facing a $2.7 million deficit, leaving thousands of savers at risk of losing their funds after the company entered special administration. The fintech, once valued at $170 million, suspended customer withdrawals in May and was officially placed under special administration last week, according to The Telegraph.

Ziglu attracted over 20,000 customers with high-yield promises through its “Boost” savings product, which offered returns of up to 6%. However, the product lacked proper protections, and administrators revealed that customer funds were used to support Ziglu’s operational costs and lending—raising major concerns about financial mismanagement.

At a recent High Court hearing, directors were accused of diverting funds from Boost accounts to cover internal cash flow issues before the company’s collapse. Around 4,000 customers are now locked out of nearly $3.6 million in Boost investments, with recovery uncertain due to the uncovered $2.7 million shortfall.

Founded by Mark Hipperson, a co-founder of Starling Bank, Ziglu once aimed to make digital money accessible and secure. In 2022, it even struck a deal with U.S. fintech giant Robinhood, which ultimately fell through amid broader crypto market volatility.

The Ziglu crisis adds to growing criticism of the UK’s lag in crypto regulation. While the EU and U.S. are advancing clear legal frameworks—such as MiCA and the GENIUS Act—the UK’s Financial Conduct Authority has yet to finalize its crypto oversight rules.