Dutch cryptocurrency platform Knaken has been declared bankrupt by a Rotterdam court after prosecutors alleged that around €7 million in customer funds could not be accounted for. According to reports from DutchNews, the ruling followed a bankruptcy request filed by the Netherlands Public Prosecution Service in late June after regulators raised concerns about the company. The court determined that Knaken lacked enough assets to repay customers fully after operations stopped, leaving thousands of investors at risk with potential losses. As reported by DutchNews, the collapse has sent shockwaves through the Dutch cryptocurrency community, highlighting significant vulnerabilities within the cryptocurrency market and testing the effectiveness of the new EU MiCA framework.
The bankruptcy declaration means that Knaken customers have been locked out of the trading platform and cannot reach their accounts or balances, as confirmed by the court ruling. According to DutchNews, prosecutors estimate the platform has around 30,000 customers, making the financial impact significant for the Dutch crypto community. The app and website went dark just over a month ago, leaving customers unable to access their accounts through its website. The court declared both the company and the Stichting Knaken Payments foundation bankrupt, which was set up to protect customer funds in case of company failure. The foundation had not begun paying out, which Knaken said needed careful legal and operational preparation. Customers also have little safety net as Dutch compensation schemes do not cover crypto, unlike bank deposits, meaning recovery depends entirely on what the trustee can trace.
Knaken operated as a Dutch crypto broker in Rotterdam but never obtained a license from the Dutch markets regulator, the AFM. The EU's MiCA rules, formally known as the Markets in Crypto-Assets regulation, made that license mandatory, and the Netherlands enforced its MiCA licensing deadline early on June 30, 2025, one of the strictest in the bloc. Dutch regulators had already fined OKX over MiCA breaches in 2025, demonstrating the enforcement approach. Knaken went offline in June 2026 after failing to comply with the mandatory licensing requirements. The company argued that it did not need to go bankrupt and that customer money was already safe, but the court disagreed, naming an independent trustee to take control and recover what it can.
The Dutch Authority for the Financial Markets alerted prosecutors to what it described as a 'very concerning situation' at Knaken. A criminal investigation is underway into the alleged missing customer funds, with authorities now actively tracing the €7 million shortfall. The fraud investigation service FIOD raided the company on June 29, seizing computers, phones and part of its assets. The court stated that 'a large amount of customer money has disappeared without it being clear how this could have happened'. Initial reports suggest that the company may have faced internal financial mismanagement, contributing to its downfall. No one has been arrested in connection with the criminal case, which remains separate from the bankruptcy proceedings.
Under MiCA rules, licensed firms must keep client coins separate and safe, with that money staying out of reach of the company's creditors. However, Knaken set up a separate legal entity, Stichting Knaken Payments, to hold client coins apart, but that shield only works if the money is actually there. Dutch law gives crypto no automatic protection if a platform fails, so firms use such foundations to hold client coins apart. The company had previously operated as a Dutch crypto services provider but was not listed among the firms authorized under the new MiCA system at the time of its collapse. Knaken was once known for its user-friendly platform and wide range of digital currencies, making its sudden financial collapse particularly surprising to the industry.
The bankruptcy arrives shortly after the European Union completed its transition to the Markets in Crypto-Assets framework. Under the new regime, crypto service providers need authorization from an EU regulator to continue offering covered services across the bloc. The Netherlands ended its national transition period earlier, while the wider MiCA transition ended on July 1, 2026. The EU had issued 244 MiCA licenses by June 29, while firms without authorization had to wind down covered EU services after the July 1 deadline. The incident serves as a stark reminder of the potential pitfalls of investing in cryptocurrencies without adequate safeguards, with growing pressure on regulators to enhance oversight and implement stronger protective measures. Payouts could take months, and nothing is guaranteed for customers.
