A court in Rotterdam has declared Dutch cryptocurrency platform Knaken bankrupt, after prosecutors said roughly €7 million ($8.1 million) in customer funds could not be accounted for.
The ruling, issued Thursday, followed a bankruptcy petition filed by the Dutch Public Prosecution Service (OM) in late June, acting on warnings from the Dutch Authority for the Financial Markets (AFM) about what it called a “very concerning situation” at the platform.
According to the NL Times report, the court did not soften its assessment. “Knaken has many customers, and there is a significant deficit in funds at Knaken, of which customers have not been informed,” it said. “Consequently, a large amount of customer money has disappeared without it being clear how this could have happened.” Declaring the company bankrupt, the court found, was in the public interest.
The ruling also placed Stichting Knaken Payments, the foundation set up to safeguard customer deposits, into bankruptcy alongside the trading company, Knaken Cryptohandel B.V.
A Failed Safeguard
The foundation existed specifically to hold and protect customer funds separately from the operating business, a structure meant to ensure users could recover their money if the company failed.
Its collapse into the same proceedings undercuts the very protection it was designed to provide. With both entities insolvent, the segregation that should have shielded customer deposits appears not to have held.
30,000 Customers Locked Out
Prosecutors estimate around 30,000 customers have been affected, according to figures reported by broadcaster NOS, though that number is the OM’s own estimate rather than an audited count. On the platform, users could convert euros into cryptocurrencies such as Bitcoin and Ethereum, trade them, and store digital assets.
Access vanished abruptly. Knaken’s website and mobile app went dark in early June, leaving customers unable to view balances or withdraw funds. In the weeks since, users have had no route back to their holdings and no clarity on what remains.
Knaken proposed distributing whatever funds were still available among its customers and argued that bankruptcy was not the best way to wind down the business, contending that customers’ interests were already protected by criminal-law measures, including assets seized by investigators. The court rejected the proposal, finding that Knaken held too little capital to repay customers in full.
MiCA Was the Trigger
The collapse traces back to Europe’s crypto licensing regime. Knaken went offline after failing to secure a MiCAR license from the AFM, the authorization that has been mandatory for firms serving EU crypto customers since the Markets in Crypto-Assets (MiCA) framework’s transition period expired on July 1, 2025.
Without that license, Knaken could not legally continue operating. Rather than resolving the compliance gap, the platform ceased functioning entirely, freezing customer accounts in the process. The case is among the more significant Dutch crypto failures in recent years, and it arrives as European regulators tighten oversight of digital-asset firms under MiCA.
The company had operated for close to a decade and, in a 2024 report, had itself acknowledged financial vulnerabilities — an admission that reads differently in hindsight.
The Criminal Investigation
Running parallel to the bankruptcy is a criminal investigation led by the Fiscal Information and Investigation Service (FIOD), the Netherlands’ financial-crime unit, opened after the AFM raised concerns and filed a complaint.
On June 29, the day before prosecutors filed the bankruptcy petition, FIOD investigators raided Knaken’s premises, seizing computers, phones, and a portion of the company’s assets. No arrests have been made. Prosecutors have stressed that the civil bankruptcy and criminal probe are handled by separate teams.
A court-appointed trustee will now take over Knaken’s remaining assets, review its finances, and determine how much can be returned to customers and other creditors. For the roughly 30,000 users locked out since early June, the central question remains unanswered: whether they will see their money again and how €7 million came to be missing in the first place.
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