Zigluʼs collapse: UK crypto ‘small fryʼ struggle to succeed

The UKʼs “small fry” crypto startups are struggling to succeed, despite regulatory tailwinds. Five crypto-asset companies have shut down since 2020, despite obtaining a coveted Financial Conduct Authority (FCA) registration.

Ziglu is the latest, ceasing operations on June 25 before applying for special administration with the FCA. The firm made an annual loss of more than £4.4 million in 2023 and £15.8 million in 2022, according to its earnings report filed in September 2024.

On a podcast in February, Ziglu founder and CEO Mark Hipperson said: “A few companies have failed that deal with cryptocurrencies. There can be smaller failures that do impact the marketplace, but I don’t believe many of those impacted UK retail customers.”

Ziglu’s own financial filings indicated material uncertainty about its status as a “going concern”, although the FCA did not respond to queries whether its financial position triggered any form of investigation.

With its e-money institution (EMI) licence, Ziglu previously caught Robinhood’s attention as a “compliance gateway” to the UK market in 2022. However, the $170 million acquisition deal collapsed in 2023, which Ziglu cited as a “major driver” behind its financial situation.

Repeated history

Ziglu follows other crypto firms — including BottlePay, Digivault, Fibermode and Genesis Custody — which also closed down despite being FCA-registered.

BottlePay, a Bitcoin payments app, announced it would cease operations on July 24, 2023. The firm is currently in the liquidation stage, according to Companies House. BottlePay previously shut down due to “regulatory reasons” in 2019 but relaunched in 2020; it also registered for FCA’s Money Laundering Regulations (MLRs) in 2023.

The liquidation progress report showed that the refund totalling £39,144 has been realised by the joint liquidators. In its 2021 balance sheet, BottlePay had net assets of £12.4 million as of March 31, 2021, but £1.2 million of debt in 2022.

Under the UK’s Electronic Money Regulations 2011, BottlePay’s customers funds are held by Modulr FS in segregated accounts, which are now being released to customers in intervals.

Digivault went into liquidation after parent company Eqonex went bust. In this case, the FCA was concerned that Binance was trying to get into the UK market via a loan it had made to Eqonex through another of its businesses, Bifinity.

Fibermode shut down in 2023 after its parent, Mode Global, failed to raise capital.

Ziglu ambiguity

Meanwhile, it remains unclear whether FCA regulation covers all of Ziglu’s products. For example, the firm offered Boost accounts, which were marketed as “investment accounts” despite the firm not being registered as an investment firm.

The firm has been taking in “deposits” in the form of Bitcoin and stablecoin TGBP through its Boost accounts. Although the Bank of England (BoE) stated that all deposits in authorised banks, building society and credit unions are covered by the Financial Services Compensation Scheme (FSCS), this protection does not include cryptocurrencies.

There is also ambiguity around who held the segregated client account containing £6.5 million in crypto assets, as noted in Ziglu’s Companies House filing in October 2024.

However, Hipperson stressed in the podcast: “Almost a third of my staff are focused on FCA regulation, compliance, risk management, functions to try to make sure that everything that we do follows all the regulations and rules.”

Halo effect

The collapse of UK-based crypto firms exposed vulnerabilities within the digital assets sector, with the global count standing at 10,993 in 2025 while newly founded crypto firms are declining annually, according to Coinweb.

Speaking at a parliamentary inquiry on June 10, FCA chair Ashley Alder said: “In the very recent past, there was a question of regulation and an apparent halo effect in relation to crypto. As we have seen, the fact that the number of individuals interacting with crypto has increased has meant that our overall approach — which is to bring the sector into regulation — is correct.”

With consultations published under its Crypto Roadmap, the FCA is generally opting for a “balanced” approach to digital assets. However, Alder highlighted that several crypto firms are still failing to meet anti-money laundering (AML) standards.

He added: “We have approved 51 out of 372 applications [not meeting anti-money laundering criteria]. The sort of issues that we have seen in AML registration boil down to poor internal controls. In other words, they are not up to scratch in relation to AML.”

This is the second story in our series on Ziglu’s collapse. Next, we will examine how Ziglu’s finances were in doubt last year, with directors linked to a failed investment firm.