Knaken Declared Bankrupt in Rotterdam Amid €7M Theft Probe

A Rotterdam court has declared Knaken bankrupt after €7M in client funds vanished, leaving 30,000 customers without access to their crypto assets.

The court’s decision initiates a formal liquidation process while authorities investigate the company’s operations and the fate of assets belonging to tens of thousands of users.

Approximately €7 Million in Client Funds Missing

The Rotterdam court issued the ruling on July 16, following a request from the public prosecutor to open insolvency proceedings as part of an ongoing criminal investigation.

Investigators report that roughly €7 million in client assets cannot be traced. The court determined that the company’s remaining assets are insufficient to satisfy all creditors, making bankruptcy necessary to ensure an organized distribution of what remains.

An appointed liquidator will now take control of the assets, assess the company’s financial status, and coordinate any potential recovery of funds for affected clients.

Thousands of Customers Locked Out of Assets

The platform ceased operations in early June, at which point users lost the ability to log into their accounts or withdraw their cryptocurrency holdings.

Authorities estimate that approximately 30,000 customers are affected. For weeks, these individuals received little to no information regarding the company’s financial health or the prospects of getting their money back.

According to the court, this lack of transparency prevented clients from accurately assessing their legal standing, a responsibility that now shifts to the court-appointed administrator.

Investigation Highlights MiCA Regulatory Standards

The bankruptcy proceedings follow a criminal probe triggered by reports of the missing funds. On June 30, the Dutch Public Prosecution Service officially requested the start of the procedure, while the FIOD financial intelligence unit raided the company’s offices, seizing computers, servers, and other property as evidence.

In tandem with these actions, authorities noted that Knaken does not appear on the register of licensed crypto-asset service providers maintained by the Dutch Authority for the Financial Markets (AFM). Investigators claim the company operated without the necessary permits required under the European regulatory framework, including MiCA regulations.

This case represents one of the first major tests for the European oversight system since MiCA took effect. As regulators tighten licensing requirements for crypto firms, the Knaken collapse underscores the risks investors face when using platforms that fail to meet regulatory standards.