Dutch Crypto Platform Knaken Declared Bankrupt Over €7M Customer Fund Shortfall

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Dutch crypto platform Knaken has been declared bankrupt, with prosecutors estimating that around €7 million in customer money and cryptocurrencies cannot currently be accounted for. The July 16 ruling covers both Knaken Cryptohandel B.V. and its affiliated Stichting Knaken Payments. A Rotterdam court found that the two entities lacked enough assets to fully repay customers. The Netherlands Public Prosecution Service had requested the bankruptcy on public-interest grounds following concerns about the company’s handling of customer funds and repayments.

• Knaken and its affiliated payments foundation were declared bankrupt.
• Around €7 million in customer assets is reportedly unaccounted for.
• Customers lost access after the platform went offline.
• Available assets were insufficient to repay all users in full.
• A criminal investigation is examining what happened to the funds.
• Authorities have not confirmed theft, fraud or a cyberattack.

Court Rejects Knaken’s Repayment Plan

Knaken stopped providing crypto services after failing to obtain the regulatory authorization required to operate in the Netherlands. Its website and app went offline, leaving customers unable to access their balances. The company opposed the bankruptcy request and argued that assets seized by financial crime investigators could support a controlled repayment process. It proposed verifying the available funds before distributing them through the affiliated foundation.

Knaken had previously described its financial position as vulnerable in its 2024 annual accounts. Dutch media reported that the company generated nearly €765,000 in revenue and recorded net profit of €28,712 during the year, indicating that it entered the regulatory transition with a relatively limited financial buffer. However, those figures alone do not explain how the later multimillion-euro customer-fund shortfall developed.

However, the court rejected the proposal after finding that Knaken had stopped meeting its payment obligations and did not hold enough assets to repay customers in full. Customers had also not been properly informed about the size of the deficit. The bankruptcy of Stichting Knaken Payments is significant because the entity was connected to Knaken’s customer payment structure. Public information does not yet explain how much money or cryptocurrency was held by each entity or where the shortfall occurred.

Knaken is not the only crypto business to enter court-supervised proceedings after financial pressure disrupted operations. Digital asset trading firm BlockFills filed for Chapter 11 bankruptcy amid a liquidity crisis, highlighting how funding shortfalls can quickly affect customers and counterparties.

Missing Funds Remain Under Investigation

Dutch financial crime investigators searched locations connected to Knaken before the bankruptcy request and seized assets and digital equipment. The criminal investigation is separate from the bankruptcy process and will examine what happened to the customer funds. The reported €7 million should not be described as confirmed stolen funds. Authorities have not publicly established whether the assets were transferred, mismanaged or lost through another cause.

A court-appointed administrator will now review Knaken’s financial records, customer claims and remaining assets. The amount available for repayment is not yet known, and it remains unclear how much customers will recover. Crypto bankruptcy recoveries can continue for years after a platform collapses. In a separate case, the FTX Recovery Trust scheduled a $2.2 billion creditor distribution as part of its fourth major repayment round, showing how recoveries depend on assets located during the insolvency process.

Founded in Rotterdam in 2017, Knaken developed as a consumer-facing platform that allowed customers to buy, sell and store cryptocurrencies. The company increased its public visibility through sponsorship arrangements involving major Dutch football clubs, including Ajax and Feyenoord, and reportedly grew to around 45 employees before its operations were suspended.

Knaken’s failure to obtain regulatory approval explains why it stopped operating, but it does not explain how the customer fund shortfall developed. That remains the central question in the investigation. Under Dutch MiCA rules, crypto service providers must hold a licence or authorization from the AFM or another European regulator. The Netherlands ended its transition period for previously registered crypto providers on June 30, 2025, while approved firms are listed in the AFM’s crypto-asset service provider register.

Regulatory costs have also contributed to financial pressure elsewhere in the crypto sector. Bitcoin Depot filed for Chapter 11 bankruptcy after reporting declining revenue, higher compliance costs and mounting legal challenges, although its circumstances differ from the unresolved customer-fund issue at Knaken.