Dutch crypto platform Knaken declared bankrupt, €7m missing

A court in Rotterdam has declared the Dutch crypto platform Knaken bankrupt, after prosecutors said €7 million in customer funds had gone missing. The public prosecution service requested the bankruptcy in June and has opened a criminal investigation.

Knaken customers have been locked out of the trading platform and cannot reach their accounts or balances, the court said in its ruling. It found that the company has too little capital to repay customers in full.

Prosecutors estimate the platform has around 30,000 customers, broadcaster NOS reported. The app and website went dark just over a month ago, and the fraud investigation service FIOD raided the company in late June, seizing computers, phones and part of its assets.

Customer money was meant to sit in a separate foundation, Stichting Knaken Payments, set up so that clients would not lose their funds if the company failed.

The foundation had not begun paying out, which Knaken said needed careful legal and operational preparation. The court declared both the company and the foundation bankrupt.

Founded in 2017, Knaken let customers convert money into cryptocurrencies and trade them, and became a shirt sponsor of Ajax and Feyenoord in 2021. It ran into trouble this year when new European rules required crypto firms to hold a licence, which it was unable to obtain.