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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On April 29, UK Finance Minister Rachel Reeves unveiled new plans that outline a comprehensive regulatory framework for digital assets. According to a statement from the Treasury, under the new rules, crypto exchanges, brokers, and service providers will be supervised similarly to traditional financial institutions in terms of transparency, consumer protection, and operational resilience.

Six New Activities to Fall Under FCA Oversight

With the Financial Services and Markets Act (Cryptoassets Order) set to take effect in 2025, six new types of activity—including crypto trading, custody services, and staking—will be subject to regulation.

Unlike the European Union’s MiCA approach, the UK is adopting a stricter regulatory stance on crypto. This includes capital requirements, governance standards, market abuse rules, and disclosure obligations.

Dante Disparte, Circle’s global policy chief, described the move as a “meaningful step” toward building a rules-based digital asset economy. He emphasized that regulatory clarity offers the predictability needed to grow responsible digital financial infrastructure.

Stablecoins to Be Defined as Securities

Under the new draft, stablecoins will no longer be considered e-money but instead classified as securities. This means fiat-backed tokens issued in the UK must comply with prospectus-like disclosures and redemption procedures. Foreign stablecoins, however, will only be allowed through authorized platforms.

Disparte highlighted the importance of predictability in regulations, stating, “A clear framework without arbitrary enforcement supports responsible growth.”

FCA Approval Required for Foreign Crypto Platforms

Another major shift is the requirement for FCA authorization for foreign firms looking to access the UK retail market. The “overseas persons exemption” will be limited to specific B2B relationships, effectively ring-fencing retail operations.

Staking services will also come under regulatory scope. Liquid and delegated staking models will require FCA registration, while solo stakers and interface-only providers will be exempt.

New custody rules will apply to systems that grant unilateral transfer rights, which may introduce additional burdens for certain DeFi structures.

Zade noted that the broad definition of staking might include decentralized models, and restrictions on credit card purchases—aimed at high-risk use—could discourage retail participation.

Expected to Take Effect in 2026

The final version of the new rules is expected to be announced in 2026. With this, the UK is set to follow a roadmap similar to that of the European Union, aiming to create a clearer regulatory framework for digital assets.

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“We are concerned that consumers purchasing crypto assets through credit could fall into unsustainable debt, especially if the value of crypto assets drops and they rely on that value for repayment.”</>

FCA Ban Strategy and Reasons

The FCA states that crypto purchases with credit could lead consumers into unsustainable debt. Sudden fluctuations in the value of crypto assets can expose investors to significant losses. Authorities continuously warn consumers that crypto investments are high-risk and carry the potential for total loss.

“We are considering several restrictions, including limiting the use of credit cards to directly purchase crypto assets and using credit limits provided by an e-money firm,” it says.

This supports the goal of curbing risky investments.

The FCA noted that 14% of crypto investors used credit to purchase crypto last year, up from 6% in 2022. However, the FCA indicated it is considering exempting certain stablecoins from the proposed restrictions. This imposes transparency, consumer protection, and operational resilience standards on crypto firms, similar to those in traditional financial sectors. The Financial Conduct Authority aims to regulate the market with these rules. Reuters reports that the UK aims to collaborate with the U.S. on crypto regulations.
Hannah Meakin from the law firm Norton Rose Fulbright stated that the FCA is trying to balance innovation with appropriate oversight, saying.

“However, this is no easy task, and it remains to be seen whether they can strike the right balance.”

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This approval allows BlackRock to operate its new Bitcoin exchange-traded product (ETP) under a UK entity.

FCA Registration: What Does It Mean for BlackRock?

Managing a staggering $12 trillion in assets, BlackRock became the 51st crypto asset firm registered by the Financial Conduct Authority (FCA) on April 1.

This registration puts BlackRock alongside major players like Coinbase, PayPal, and Revolut. However, FCA has faced criticism for approving only 14% of applications submitted.

The FCA did not immediately respond to requests for comment.

Bitcoin ETP Listed in Europe

The iShares Bitcoin ETP was recently listed on Euronext Paris and Amsterdam stock exchanges.

Initially launched with a 10 basis point fee waiver, the expense ratio is set at 0.15% until the end of the year. Once the waiver expires, it will increase to 0.25%, matching competitors like CoinShares.

According to Bloomberg, this Bitcoin ETP is accessible to both institutional and informed retail investors.

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Manuela Sperandeo, BlackRock’s Head of Europe & Middle East iShares Product, stated: “This marks a tipping point in the industry—established demand from retail investors is now being matched by growing professional interest.”

BlackRock’s Spot Bitcoin ETF Success in the US

In January 2024, BlackRock launched the first spot Bitcoin ETF in the US. Since then, it has grown to over $47 billion in assets, making it the largest ETF in the US.

US-based spot Bitcoin ETFs collectively attracted $107 billion in their first year—growing faster than any other ETF category in history.

BlackRock declined to comment on the developments.

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Thanks to the FCA approval, Coinbase will be able to serve both retail and institutional customers in the UK and provide crypto-fiat conversion transactions. With this license, Coinbase strengthened its position as the largest regulated crypto exchange in the country.

UK’s Crypto Goals and Coinbase’s European Plans

As the UK takes steps towards becoming a global crypto hub, the FCA plans to establish a full crypto regulatory framework by 2026. Crypto adoption in the country is growing rapidly, with 12% of British adults owning digital assets, up 2% from 2023, according to research published by the FCA in November 2024. The average crypto asset amount also increased from £1,595 ($1,964) to £1,842 ($2,268).

Coinbase is already licensed in European countries such as Ireland and Germany and operates as a crypto service provider in the Netherlands and Italy. While the FCA approval strengthens the company’s expansion strategy in Europe, Coinbase also appears to be turning its sights on the Asian market.

Coinbase Plans to Expand to Southeast Asia

Coinbase CEO Brian Armstrong met with Philippines Finance Minister Ralph Recto at the World Economic Forum in Davos to discuss its strategy for entering the Southeast Asia region. The Philippines Ministry of Finance announced that Coinbase is considering investing in the country.

The company has supported local stablecoin projects in the Philippines and Thailand while conducting research on how crypto can improve financial systems in these regions. Coinbase also began operating in Singapore in October 2023, receiving regulatory approval.

Coinbase’s successful completion of the regulatory compliance process in the UK and Europe signals that the company may accelerate its expansion plans into Southeast Asia.

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With this approval, GSR becomes the first crypto liquidity provider to achieve dual regulatory authorization from both the FCA and the Monetary Authority of Singapore (MAS).

New Services and Rising Demand

The FCA approval will enable GSR to provide services such as over-the-counter (OTC) and programmatic execution trading for clients in the UK.

• This development is particularly significant as demand for regulated crypto trading solutions has risen sharply since Bitcoin surpassed the $100,000 milestone in December 2024.
• Institutional investors entering the market throughout the year have further fueled this demand.

Dual Regulatory Authorization

GSR’s Group CEO, Xin Song, highlighted that dual authorization allows the firm to “confidently expand [its] services to institutional and professional clients globally.”

This dual compliance demonstrates GSR Markets UK’s adherence to the regulatory standards of major global markets in both the UK and Singapore.

Service Expansion

With FCA’s green light, the company is well-positioned to address the growing demand for regulated and reliable trading platforms as industry players increasingly prioritize compliant solutions in crypto markets.

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GSR Markets UK CEO Jakob Palmstierna noted that this milestone will enable the company to better support its clients “as they navigate the dynamic, rapidly growing market.”

The firm’s global operations include over 120 employees in the UK, making it one of the largest crypto-native employers in the region.

MPI License in Singapore

On April 4, 2024, GSR Markets secured its Major Payment Institution (MPI) license from MAS. This license allows the firm to offer multiple payment services and exceed the volume limitations imposed on payment firms.

• With the MPI license, GSR can surpass the SG$3 million ($2.2 million) volume limit for a single payment service and the SG$6 million ($4.4 million) monthly limit for two or more services.

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The FCA issued a warning regarding the Solana-based “Retardio” project, citing unauthorized financial promotions and activities targeting UK consumers.

In a statement on December 16, the FCA warned that the token might be providing or promoting financial services without the regulator’s approval.

The regulator reminded consumers to transact only with FCA-approved firms to ensure adequate protection. According to CryptoSlam, the Retardio project features a Solana-based NFT collection that has achieved $31 million in total sales.

The associated memecoin, as reported by Dexscreener, is currently trading at around $0.08 with a market capitalization of approximately $87 million.

The Retardio Project Responded To The FCA

According to the FCA, UK-based users dealing with the Retardio project will not have access to the Financial Ombudsman Service, which resolves complaints between consumers and financial services firms. The regulator also stated that consumers would not be covered by the Financial Services Compensation Scheme (FSCS), which protects consumers if financial firms go bankrupt.

The FCA added, “This means it’s unlikely you’d get your money back if the firm goes out of business.”

The FCA urged citizens to deal with authorized firms. The regulator emphasized that authorized firms provide greater protection to consumers when things go wrong and suggested users check their registry to ensure the firm they are dealing with is authorized in the UK.

The government agency also encouraged reporting unauthorized firms through official channels. In a humorous response, the memecoin and NFT project said, “We’ve issued a warning about the UK’s financial regulator.”

Memecoins Represent The Value of Attention

Yat Siu, Chairman of Animoca Brands, stated that memecoins capture the value of user attention, which is different from traditional metrics on social platforms.

Siu mentioned that attention on social platforms does not transparently reflect the value of user-generated content (UGC), but memecoins work differently.

He explained that in the Web3 world, UGC culture is integrated into memecoins, with their market capitalization reflecting the value of the attention they receive.

“If attention were a token, that’s exactly what memecoins represent. So I see it as correlated between the two,” he said.

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The FCA warned citizens about Pump.fun and emphasized that users of the platform would not be able to benefit from consumer protection mechanisms. The authority advised avoiding business dealings with the platform and urged extreme caution against potential fraud.

Following the ban, users in the Pump.fun Telegram support channel noted that the platform is no longer available in the United Kingdom. Some users indicated they would attempt to access the platform using VPNs.

The UK is currently developing a comprehensive regulatory framework for digital assets. New regulations covering stablecoins, staking, and other crypto activities are expected in the near future.

What is Pump.fun?
Operating on the Solana blockchain, Pump.fun is a decentralized platform that allows users to create tokens without requiring technical expertise. Launched in January 2024, the platform gained attention with its simple and low-cost token creation process.

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This latest development follows the passage of a landmark financial markets bill in June 2023. This bill laid the groundwork for treating crypto assets, including stablecoins, as regulated financial activities within the U.K.

Local regulators, the Financial Conduct Authority (FCA) and the Bank of England (BoE), have already been actively involved in shaping the crypto regulatory landscape. In February 2024, they held consultations to define a framework for stablecoin regulation. The BoE plans to oversee systemically important stablecoin providers, while the FCA will focus on regulating the broader crypto ecosystem.

Time is of the Essence

Afolami previously hinted at additional stablecoin legislation in February, emphasizing the government’s goal of implementation within six months. This urgency likely stems from the U.K.’s upcoming election, potentially in 2024. A change in government could lead to a shift in crypto policy, with the current frontrunner, the Labour Party, having yet to reveal its specific plans.

What This Means for the Crypto Industry

The introduction of comprehensive crypto regulations in the U.K. signifies a significant development for the industry. It provides greater clarity for businesses operating in the space and fosters a more secure environment for investors. This could potentially attract new players and investment to the U.K.’s crypto scene.

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The regulator has expressed no objections to the establishment of a crypto asset-backed ETN market for professional investors. However, it emphasized that these crypto-backed products are not suitable for retail investors, who are still restricted from trading such products, as per the FCA’s statement.

The London Stock Exchange has announced its readiness to accept applications for bitcoin and ether-backed ETNs in the second quarter of 2024.

The FCA clarified in a press release that it would not oppose requests from Recognized Investment Exchanges (RIEs) to establish a listed market segment for crypto asset-backed ETNs, signaling the growing institutionalization of cryptocurrency markets.

These ETNs, which are a type of exchange-traded product typically issued by banks or investment managers to track underlying indices or assets, will be available to professional investors, including investment firms and credit institutions, according to the FCA.

Exchanges planning to offer these products will be tasked with ensuring adequate controls are in place to maintain orderly trading and provide proper protection for professional investors, as stated by the regulator.

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