Dutch Authorities Push Knaken Crypto Platform Toward Bankruptcy as 30,000 Users Remain Locked Out
Dutch authorities are taking legal action against failed crypto platform Knaken as concerns grow over thousands of customers who remain unable to access their funds.
The Dutch Public Prosecution Service has asked a Rotterdam court to declare Knaken Cryptohandel and its related organization Stichting Knaken Payments bankrupt, arguing that the move is necessary in the public interest. The platform has been offline since early June, reportedly leaving around 30,000 users unable to withdraw their assets.
Knaken allowed customers to buy, sell, exchange, and store cryptocurrencies such as Bitcoin and Ethereum using euros. However, these services require authorization from the Dutch financial regulator Autoriteit Financiële Markten (AFM) under the European Union’s crypto regulations, and the company never secured the required license.
While Knaken has said it is shutting down operations and moving through a wind-down process, prosecutors raised concerns about whether the process is being handled properly. Authorities said the company had stopped processing customer payouts and had reportedly advised users against submitting compensation claims.
The prosecution service is using its civil powers to request a bankruptcy declaration, which would place the company under the control of a court-appointed trustee if approved. The trustee would then review Knaken’s remaining assets and determine how funds should be distributed among customers and other creditors.
Alongside the bankruptcy request, Dutch authorities are also investigating possible criminal violations. The Fiscal Information and Investigation Service (FIOD) launched an investigation following reports from the AFM and conducted searches earlier this week, seizing electronic devices and company-related assets. No arrests have been announced.
The legal battle comes as Europe’s crypto sector faces a stricter regulatory environment under Markets in Crypto-Assets (MiCA). The transition period allowing some companies to operate under older national frameworks is ending, forcing crypto platforms without approval to stop serving customers across the European Union.
Industry observers expect the regulatory shift to reduce the number of crypto firms operating in Europe, with only a limited number of companies having obtained full authorization so far.
Knaken had previously positioned itself as a mainstream crypto brand in the Netherlands through sponsorship deals with major football clubs, including AFC Ajax, Feyenoord, and Sparta Rotterdam. However, those partnerships ended over time, and the company later described itself as financially vulnerable in its 2024 annual report.
The collapse highlights growing pressure on European crypto businesses to meet regulatory requirements as authorities move to protect consumers and enforce compliance across the digital asset industry.