Defunct Ziglu’s finances in doubt last year; directors linked to failed investment firm

The directors of UK crypto firm Ziglu raised “significant doubts” about its ability to continue as a going concern in accounts filed on October 13, 2024.

UK Companies House records show Ziglu shared directors with another failed firm, Donre Advisory, which the UK Financial Conduct Authority (FCA) closed last year.

Ziglu was launched in 2018 by Mark Hipperson and John Humpish, both of whom identify themselves as Starling Bank co-founders. Compliance Corylated reported yesterday that Ziglu applied to the FCA for special administration on June 26; it is registered with the FCA as a crypto asset firm as well as being a licensed e-money institution (EMI).

The firmʼs most recent accounts show at year-end 2023 it held £7,250,155 of client money, in crypto (£6,705,034) and cash (£545,121).

Some customers are now reporting they have not been able to access their funds. Compliance Corylated could not determine where Ziglu customer money was safeguarded.

Hipperson and Humpish did not respond to messages seeking comment. The FCA declined to comment.

‘Significant doubtsʼ

Ziglu’s latest accounts showed a year-end loss of £4,443,701 for 2023 and a loss from 2022 of £15,833,919. In 2023, Ziglu’s turnover from commissions was a mere £104,231. Its cost of sales, distribution costs, and administrative expenses were £4,823,459.

The accounts said directors prepared the financial statements on a going concern basis, but there were “material uncertainties which may cast significant doubt on the group and companyʼs ability to continue as a going concern”.

Relaunch

The company had been trying to regroup after a failed takeover bid by Robinhood, its 2023 accounts said. These said the US neo-broker did provide Ziglu with £5 million in financing, but according to contemporaneous reporting from Axios, that investment has been written down to zero.

Ziglu said it “deliberately” reduced trading activity and customer onboarding during 2023 “following the strategic decision to focus resources on building [a] more robust regulatory environment with the assistance of a specialist firm to support the forward-looking growth plans”. It said it was aiming launch a stock trading and investing platform.

Also according to the accounts, the company had exposure to the failed Celsius Network, which owed it over £4 million. A US cryptocurrency company specialising in staking, the Celsius Network went into bankruptcy in July 2022. Ziglu’s 2023 accounts said it had recouped that money from Celsius and was seeking additional financing.

Shared directors with Donre

Humpish is also a director at Onvestor Advisory, which according to the FCA register was an authorised representative of Donre Advisory.

Onvestor directors Michael Basi and Nicholas Basi were also directors at Donre, which the FCA shut down, citing lack of approved senior managers — including no compliance officer or money laundering reporting officer — as well as a lack of appropriate financial and non-financial resources. Donre’s own funds were negative £43,000, according to the FCA.

Onvestor’s website still claims it is an authorised representative of Basi & Basi, the predecessor firm to Donre.

Michael Basi is a director in the dormant company Ziglu Investment, and was a director of Ziglu until January this year. Nicholas Basi and Humpish are directors in Zugo, a wealthtech start-up that purports to use artificial intelligence (AI) to bridge the advice gap while ensuring consumer duty compliance. Hipperson was a director of Zugo until January 13 this year.

Donre owner under ASIC investigation

Donre Advisory’s person with significant control (PSC) was John Lymer, a director and operations manager at Brite Advisors in Hong Kong. Brite Advisors has been under investigation by the Australian Securities & Investments Commission (ASIC) since at least 2023.

ASIC alleges Brite Advisors misappropriated client funds. Court-appointed receivers suspect (see receivers and managers report 24 January 2024) that Lymer may have acted as a director and shadow director even when not a formal director. He is also suspected of systemic mishandling of client funds and assets, being engaged in dishonest or misleading conduct, and of a failure to keep accurate records and failure to implement robust client money systems and controls.

ASIC’s last update on Brite Advisors was published on its website on February 6, 2024. ASIC has a dedicated page for its Brite Advisors enforcement.

There is no suggestion that the directors of Onvestor, Donre or Ziglu were involved in the alleged wrongdoing at Brite Advisors.

This series of articles about Ziglu Ltd was reported by Rachel Wolcott, Niece Prayoonrat, and Lindsey Rogerson.