From Promises of High Returns to Frozen Funds

Launched in 2021, Ziglu attracted nearly 20,000 customers with its “Boost” product, offering yields up to 6%—a tempting offer at a time of historically low interest rates. However, these products lacked consumer protection and were not segregated, enabling the company to use customer funds for operational needs and lending.

In May, the UK’s Financial Conduct Authority intervened, leading to the suspension of all withdrawals. The company then entered special administration last week, after administrators uncovered a $2.7 million deficit.

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Court documents revealed that Ziglu directors may have redirected Boost funds to cover cash flow problems prior to applying for administration in June. An estimated $3.6 million in customer investments remains frozen, with around 4,000 individuals affected.

Ziglu’s Future Hangs on Sale or Rescue

Once valued at $170 million, Ziglu had secured a deal with U.S. fintech firm Robinhood in 2022. However, the agreement collapsed amid broader crypto market instability.

Now under the control of administrators from RSM, the company’s remaining assets may be sold to recover lost funds. Without a successful deal, most savers stand to lose a significant portion of their investments.

UK Lags in Crypto Regulation

Industry observers argue that the UK is falling behind global competitors in digital asset regulation. Unlike the EU’s MiCA initiative or the U.S. Senate’s recently passed GENIUS Act, the UK has yet to establish a firm regulatory framework or a launch date for its crypto regime.

Policy delays and uncertainty have prompted criticism from experts who say the country has squandered its early lead in blockchain innovation.

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South African users will now need to provide the sender’s full name, country of residence, and, where applicable, the originating exchange name for deposits. Withdrawal transactions will also require recipient details before they are processed.

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The update will apply only to crypto transfers, leaving trading and other features unaffected.

Missing Information Could Delay or Reverse Transactions

Binance warned that missing transfer details could result in delays or reversal of funds. Starting April 24, users will be required to log in again to continue using their accounts.

This change reflects South Africa’s broader efforts to improve oversight of its fast-growing crypto market. Earlier this month, SARS (South African Revenue Service) mandated that individuals and entities involved in crypto register with the authority, stating that non-compliance is now illegal.

In March, the Financial Sector Conduct Authority (FSCA) issued warnings against two unlicensed firms, Afriinvest and Mutualwealth, for luring investors with unrealistic returns of up to 10,000 rand ($542) per day.

According to Statista, South Africa’s crypto market is expected to generate $278 million in revenue by 2025 and grow at a CAGR of 7.86%, reaching $332.9 million by 2028. In March 2024, FSCA approved licenses for 59 crypto platforms, with over 260 applications still under review.

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