A deficit of £2 million (around $2.7 million) has been found at Ziglu, a collapsed UK-based crypto company.
This gap between customer funds and company assets has raised concerns that many users may never get their money back.
Ziglu officially entered special administration after already freezing withdrawals in May, according to a July 13 report by The Telegraph.
Did you know?
Subscribe – We publish new crypto explainer videos every week!
What is Litecoin? LTC Easily Explained (ANIMATED)
The platform gained around 20,000 users by offering high-yield returns through a product called “Boost”, which promised interest rates of up to 6%.
Boost gained popularity quickly, but the funds were not kept separate from the company’s finances. Instead, Ziglu used the money to support its daily operations and loans.
In May, the UK’s financial regulator stepped in, and customers were blocked from withdrawing their funds. Since then, users have been unable to access their money.
A High Court hearing revealed that directors may have used money from Boost savers to cover the company’s regular expenses before applying for administration in June.
According to details shared during the hearing, around 4,000 customers had funds in the Boost product, which totaled nearly $3.6 million. Due to the missing $2.7 million, there is a risk that these savers could lose a substantial portion of their investments unless new funding is secured or a buyer takes over the company.
Recently, blockchain investigators shared the reasons behind a new wave of crypto-related scams. What did they say? Read the full story.
Having completed a Master’s degree in Economics, Politics, and Cultures of the East Asia region, Aaron has written scientific papers analyzing the differences between Western and Collective forms of capitalism in the post-World War II era.With close to a decade of experience in the FinTech industry, Aaron understands all of the biggest issues and struggles that crypto enthusiasts face. He’s a passionate analyst who is concerned with data-driven and fact-based content, as well as that which speaks to both Web3 natives and industry newcomers.Aaron is the go-to person for everything and anything related to digital currencies. With a huge passion for blockchain & Web3 education, Aaron strives to transform the space as we know it, and make it more approachable to complete beginners.Aaron has been quoted by multiple established outlets, and is a published author himself. Even during his free time, he enjoys researching the market trends, and looking for the next supernova.
