Crypto platform Knaken bankrupt, €7 million in customer funds missing

Dutch crypto platform Knaken has gone bankrupt. The Rotterdam District Court declared the company bankrupt at the request of the Public Prosecution Service (OM). According to the justice authorities, €7 million of Knaken’s client funds have disappeared. This concerns approximately 30,000 customers who can no longer recover their money.

The platform, also known as a former sponsor of Ajax and Feyenoord, went completely offline just over a month ago. Knaken’s app and website suddenly went dark. The OM then decided to request the bankruptcy, as customers could not access their funds and the company seemed unable to repay the money.

No access to accounts

The court fully shares the concerns of the justice authorities. In its ruling, the judge noted that customers can no longer log into their accounts and cannot access their funds. Moreover, Knaken discourages customers from taking action through its website. “Customers can no longer access their accounts and funds. Furthermore, customers are discouraged from taking action via Knaken’s website,” the judge concluded.

According to the court, it is established that Knaken “has insufficient assets to fully pay its customers”. The company, founded in 2017, was under pressure from new European regulations. Crypto companies had to apply for a licence, but Knaken could not meet all the requirements. The 2024 annual report showed that the company had been struggling financially for years. The auditor called the crypto licence “crucial” for its survival.

Foundation was meant to protect customers

Client funds were supposed to be protected. Knaken was legally required to set up a separate foundation, Stichting Knaken Payments, so that client funds would not be lost in the event of bankruptcy. However, this foundation did not start making disbursements. Knaken said this had to be done “carefully in legal, organisational and operational terms”. “This takes time,” the company wrote on its own website.

The OM approached the court two weeks ago because no money was being disbursed. With a bankruptcy, a trustee could prevent money from disappearing. Earlier, the FIOD carried out a raid on Knaken after an unnamed regulator filed a complaint. Computers, telephones and parts of Knaken’s assets were seized. The OM is also starting a criminal investigation into possible irregularities at the company.