Users of Crypto Firm Unable to Access Their Funds as Accounts Get Frozen under 'Boost' Feature
Heads Up: Ziglu Crypto Accounts frozen, Leaving Customers in the Dark
Investors using platform Ziglu for their crypto ventures are facing an unsettling predicament, as their accounts have been inexplicably frozen. This gut-wrenching news comes straight from the horse's mouth - This Is Money.
Ziglu's 'Boost' products promised customers a chance to rake in up to 6% interest on their crypto, paid weekly. The accounts enabled digital asset investments to generate a yield through strategic partnerships with lending platforms. These partnerships offered institutional investors, such as hedge funds, the chance to borrow the coins.
On May 16, the Boost accounts were put on ice, but it took a week for the users to hear the grim news of the products' termination. Simultaneously, the Financial Conduct Authority (FCA) barred Ziglu from taking any actions related to the Boost Accounts, without prior consent[3]. The restrictions prevented customers from disposing, withdrawing, transferring, dealing with, or diminishing the value of the accounts. Additionally, new deposits were forbidden.
Customers are left in the lurch, uncertain when they'll regain access to their frozen funds. Although the FCA refused to confirm if they're investigating the matter, they urged concerned customers to contact Ziglu's customer support team first. It's worth noting that the Boost accounts were not subject to the same safeguarding as cash accounts, and customers are neither protected by the Financial Services Compensation Scheme nor the Financial Ombudsman Service[4].
An email sent to customers on Tuesday sheds some light on the situation: Ziglu is working closely with the FCA to plan the retirement of the Boost product, including the return of all funds. They aim to provide an update by June 13, but for now, customers are asked to refrain from taking immediate action.
One customer, with thousands in his account, voice his concerns: "I was initially unconcerned when Ziglu warned about discontinuing their Bitcoin Boost accounts. However, over two weeks later, withdrawals are still frozen. This is concerning and seems contradictory, as they want customers out of those accounts. While Ziglu promises a full refund, I, along with many others, would find it reassuring to have more concrete information."
Interestingly, Ziglu's other investment accounts appear to be unaffected by these developments. Although, Ziglu's CEO, Mark Hipperson, did confirm that they notified the FCA of their decision to withdraw the Boost product and indicated that customers' assets would be transferred to their Fiat accounts by June[5].
For those considering taking the cryptocurrency plunge, diversifying your investments across multiple platforms might just be the smart move in these uncertain times.
Sources:
[1] Ziglu[2] Financial Services Compensation Scheme[3] The Guardian[4] This Is Money[5] City A.M.
Investors navigating the finance and investing landscape are grappling with the impact of Ziglu's frozen crypto accounts, leaving them uncertain about their funds' return. Despite the freezing, Ziglu's other investment accounts remain unaffected, highlighting the need for diversification in these uncertain financial times.
