Key Highlights
- Dutch prosecutors want Knaken declared bankrupt to protect about 30,000 customers who can no longer access their crypto funds.
- Knaken allegedly operated without the required MiCA license, and authorities are concerned that the company is not handling its shutdown in an orderly way.
- A separate criminal investigation is underway as Europe tightens crypto rules following the end of the MiCA transition period on July 1.
Dutch prosecutors are asking a court in Rotterdam to declare cryptocurrency platform Knaken Cryptohandel B.V. and its affiliated Knaken Payments Foundation bankrupt after the exchange left an estimated 30,000 customers locked out of their accounts.
The request, filed by the Dutch Public Prosecution Service on Tuesday, aims to protect customers and make sure the company’s remaining assets are handled in a fair and organized way.
Why prosecutors want Knaken declared bankrupt
Knaken was a Dutch cryptocurrency platform where people could buy, sell, and store digital currencies such as Bitcoin and Ethereum. Users could also exchange euros for crypto and convert their crypto back into cash.
However, Dutch authorities said the company did not have the license required to offer these services. Under the European Union’s Markets in Crypto-Assets (MiCA) rules, companies providing these services must receive approval from the Netherlands Authority for the Financial Markets (AFM). According to prosecutors, Knaken never obtained that license.
Why Dutch authorities stepped in
The company has said it has stopped operating and is working to wind down its business. However, Dutch prosecutors believe the process is not moving in an orderly way. They said customers have stopped receiving payments from the company and have reportedly been told not to file claims for damages. This has raised concerns that people who still have money or crypto on the platform could face more problems if the situation is not handled properly.
In a statement, the Dutch Public Prosecution Service said it was asking the court to declare the company bankrupt “in the public interest.” Prosecutors also said they are “very concerned” about the way the company is winding down. They believe a formal bankruptcy process would better protect customers because it would place the company’s assets under the control of an independent trustee instead of leaving the company to manage the process on its own.
If the Rotterdam court approves the request, a court-appointed trustee will take over Knaken’s remaining assets. The trustee will review the company’s finances, identify what assets are still available, and decide how much can be returned to customers and other creditors.
Prosecutors said they will not be involved in those decisions, as the trustee will manage the bankruptcy independently under Dutch law.
A separate criminal investigation is underway
Meanwhile, Dutch financial crime investigators are carrying out a separate criminal investigation into possible offenses linked to the company. The investigation is being led by the Fiscal Information and Investigation Service (FIOD), which handles financial crimes in the Netherlands.
The investigation began after the AFM raised concerns about the company and filed a complaint. On June 29, investigators searched the company locations and seized laptops, mobile phones, digital storage devices, and company assets as part of the investigation. Authorities said no one has been arrested, and also explained that the criminal investigation and the bankruptcy case are completely separate and are being handled by different teams.
MiCA rules tighten oversight across Europe
The case comes as Europe’s crypto industry enters a new phase under MiCA. The transition period allowing firms to continue operating under older national rules, ends on July 1.
After that date, companies that want to offer crypto services across the European Union are expected to have the required license. Industry experts believe these new rules could reduce the number of crypto firms operating in the region, as many companies have not yet received approval.
Several exchanges, including Binance, have already stopped offering certain services in parts of Europe after failing to secure the necessary authorization or adjusting their operations to comply with MiCA. Meanwhile, platforms such as WhiteBIT and Conio have obtained MiCA licenses.
Knaken’s problems began before the shutdown
Before its troubles began, Knaken sought to raise its profile by sponsoring well-known Dutch football clubs, including Ajax, Feyenoord, and Sparta Rotterdam.
Those partnerships ended before the company’s shutdown. Dutch public broadcaster NOS also reported that Knaken described itself as “financially vulnerable” in its 2024 annual accounts, showing that the company had already been facing financial pressure before its services came to a halt.
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