MV Capital - Dutch Crypto Broker Knaken Declared Bankrupt With €7 Million Missing

A Rotterdam court has ruled Knaken Cryptohandel BV and its client foundation insolvent after €7 million in customer assets disappeared, affecting around 30,000 users who remain locked out of their accounts

Court Ruling and Immediate Impact

The Rotterdam District Court declared both Knaken Cryptohandel B.V. and the affiliated Stichting Knaken Payments bankrupt. Judges determined that the company lacked sufficient assets to repay customers and that users received inadequate information about their positions.

Prosecutors reported that approximately €7 million, equivalent to roughly $8 million, in client funds could not be accounted for. The platform had gone offline in early June, preventing withdrawals and access to balances.

Key DetailsRoughly 30,000 customer accounts affected
Company and foundation both declared bankrupt on July 16
Independent trustee appointed to manage remaining assets

Regulatory Background and License Issues

Knaken operated without authorization from the Dutch Authority for the Financial Markets (AFM). The Netherlands implemented a strict timeline for the EU's Markets in Crypto-Assets (MiCA) framework, ending its transition period on June 30, 2025.

This placed unlicensed platforms like Knaken in violation of requirements for capital, governance, and client asset segregation. The company had nine years since its founding in Rotterdam in 2017 to achieve compliance but did not obtain the necessary license.

Timeline of EventsJune 29: FIOD conducts raid and seizes devices and assets
June 30: Public Prosecution Service petitions for bankruptcy
Early June: Platform goes offline, locking users out
July 16: Court declares bankruptcy

Criminal Investigation and Asset Recovery

The Dutch Public Prosecution Service opened a criminal probe into the missing funds. The Fiscal Information and Investigation Service (FIOD) raid targeted evidence preservation as part of this separate investigation. No arrests have been reported so far.

Knaken had established Stichting Knaken Payments as a separate entity intended to hold client assets apart from company operations. However, the court found that the structure did not prevent the shortfall, leading to the bankruptcy declaration for both the company and the foundation.

“The money disappeared without it being clear how this could have happened.” — Court statement via public reports

Customer Position and Process Ahead

Users currently have no access to their accounts or balances. Recovery depends on the trustee's efforts to trace and gather remaining assets. Dutch compensation schemes do not cover cryptocurrency holdings, unlike traditional bank deposits.

The company had argued against bankruptcy, claiming customer interests could be addressed through other means and that funds were protected. The court rejected this position in favor of formal proceedings.

Aspect	Details
Customer Base	Approximately 30,000
Missing Amount	€7 million ($8 million)
Regulatory Status	No AFM license
MiCA Deadline	Netherlands: June 30, 2025

Distinction from Similar Names

Knaken, the Rotterdam-based broker, has no corporate connection to the U.S.-based Kraken exchange, which continues normal operations. The similarity in names has caused some confusion among users, but the bankruptcy affects only the Dutch entity.

This case forms part of broader enforcement actions in the Netherlands following the MiCA transition. Authorities have signaled increased scrutiny of unauthorized crypto service providers.