A Dutch court declared cryptocurrency platform Knaken Cryptohandel BV and its affiliated foundation bankrupt after prosecutors reported €7 million in missing customer funds. The ruling came from the Rotterdam court on July 16 after the platform stopped operating and blocked customer access to accounts.
The Rotterdam court said bankruptcy was necessary to allow an orderly settlement of the company. Judges found that the available assets were not enough to repay customers in full. Court documents also stated that users had not received enough information to understand their legal position or the possible recovery process.
Dutch prosecutors filed a bankruptcy petition on June 30 after opening a criminal investigation into missing customer assets. At the same time, the Netherlands’ financial crime investigation service searched the company premises and seized devices and other assets as part of the investigation.
Knaken Bankruptcy Leaves Customer Funds Exposed
Knaken asked to distribute the remaining funds among customers without entering bankruptcy proceedings. Company representatives said investigators had already seized assets during the criminal case, arguing that those measures protected customer interests. The court rejected the request after finding that the available capital would not cover customer claims.
A separate foundation had been established to keep customer funds separate from the company’s operations. The company created this arrangement to protect customer deposits if the business failed. However, the bankruptcy of both the company and the foundation removed that safeguard, leaving customer funds exposed during the insolvency proceedings.
Knaken was established in Rotterdam in 2017 and offered users the ability to convert euros into cryptocurrencies, including BTC and ETH, trade digital assets, and store their holdings on the platform. Court information shows the platform later ceased operations after cutting off customer access in early June.
MiCAR License Failure Ends Knaken Operations
Knaken stopped operating after failing to obtain a MiCAR license from the Dutch Authority for the Financial Markets (AFM). Such authorization became mandatory for crypto firms serving customers in the European Union after the transition period under the Markets in Crypto-Assets framework ended on July 1, 2025.
Without required approval, Knaken could no longer continue legal operations. Platform services ended instead of securing a license, leaving customer accounts frozen and cutting off access to digital assets held through company systems.
Court records show Knaken had been operating since 2017. Company reports published in 2024 had already pointed to financial weaknesses. The bankruptcy, criminal investigation, missing customer funds, and insolvency proceedings have put one of the Dutch cryptocurrency sector’s largest failures under close legal scrutiny.
