Key facts
- Dutch prosecutors are seeking the bankruptcy of crypto platform Knaken in the public interest.
- Knaken has been offline since early June, with 30,000 customers unable to access their funds.
- The platform lacked the necessary license from the Dutch markets regulator (AFM).
- A separate criminal investigation by the FIOD is also examining potential offenses.
- Investigators searched premises and seized assets on Monday as part of the criminal probe.
Dutch prosecutors have initiated proceedings to declare the cryptocurrency platform Knaken bankrupt, citing public interest and concerns over the accessibility of customer funds. The Public Prosecution Service has asked a court in Rotterdam to bankrupt Knaken Cryptohandel and its affiliated entity, Stichting Knaken Payments. The platform has been inaccessible since early June, leaving an estimated 30,000 users unable to reach their digital assets and euros.
Knaken facilitated the exchange, trading, and storage of cryptocurrencies like Bitcoin and Ethereum, activities that require a license from the Dutch markets regulator, the AFM, under the European Union's crypto regulations. Knaken never obtained this authorization. While the company claims to be winding down operations, prosecutors are concerned about the process not being orderly, noting that Knaken has ceased customer payouts and reportedly advised against filing damage claims.
Prosecutors are utilizing their civil authority to pursue bankruptcy in the public interest, a move prompted by warnings from the AFM. If the court approves, a trustee will manage Knaken's assets to distribute them among customers and creditors. Separately, the Fiscal Information and Investigation Service (FIOD) is conducting a criminal investigation into potential offenses, following signals from the AFM and a complaint from the regulator. This probe led to searches, seizures of devices, and confiscation of company assets on Monday, though no arrests have been made. The prosecution service emphasized that the civil and criminal investigations are handled by distinct teams.
The case emerges as Europe's Markets in Crypto-Assets (MiCA) regulation tightens, with a transition period for firms operating under older national rules expiring on July 1. After this date, platforms without authorization will be prohibited from serving EU customers, a situation expected to reduce the number of licensed entities. The Netherlands concluded its own grace period a year ago. Knaken, which previously sponsored Dutch football clubs like Ajax, Feyenoord, and Sparta Rotterdam, had described itself as 'financially vulnerable' in its 2024 annual accounts.