Knaken Collapse Tests Dutch Crypto Oversight Under MiCA

• The Rotterdam District Court ruled that Knaken could no longer meet its obligations to customers.
• Dutch prosecutors intervened in the public interest after the platform blocked user access.
• The bankruptcy comes as MiCA licensing requirements reshape the European crypto market.
• A parallel criminal investigation is examining potential financial misconduct.

Court Finds Multi-Million Euro Asset Shortfall **The Rotterdam District Court declared Knaken Cryptohandel **B.V. and its affiliated payments foundation, Stichting Knaken Payments, bankrupt on July 16, concluding that the company faced a substantial shortfall between customer liabilities and available assets. According to the ruling, approximately €7 million ($8 million) in customer funds and digital assets cannot be accounted for. The court said users were not informed of the deficit before the platform suspended its services. The bankruptcy places control of Knaken’s remaining assets, records and financial administration under an independent court-appointed trustee, who will be responsible for verifying creditor claims and overseeing the liquidation process. Public Prosecutor Took the Unusual Step of Seeking Bankruptcy Unlike most insolvency cases, the bankruptcy petition was filed by the Dutch Public Prosecutor’s Office (Openbaar Ministerie) rather than creditors or the company itself. Prosecutors argued that public intervention was necessary after Knaken shut down its trading platform, website and mobile applications, leaving customers unable to access account information needed to protect their legal interests. The court also criticized the company for discouraging users from pursuing legal action while access to customer accounts remained unavailable. The prosecutor cited several factors behind the intervention:

• Around 30,000 customers lost access to the platform.
• Users could not verify account balances or transaction histories.
• Customers lacked sufficient information to initiate insolvency proceedings themselves.
• The court found that an independent trustee was required to ensure an orderly settlement.

MiCA Exposed Deeper Problems Knaken ceased operations in early June after failing to obtain authorization under the European Union’s Markets in Crypto-Assets (MiCA) framework. Under the new rules, crypto service providers operating in the Netherlands must receive approval from the Dutch Authority for the Financial Markets (AFM). Without a license, Knaken halted trading, a move that ultimately exposed the gap between customer obligations and available assets. The company argued that assets already frozen by authorities, together with its custody arrangements, would allow it to manage repayments independently. The court rejected that proposal, concluding that only an independent bankruptcy trustee could safeguard creditors’ interests. Criminal Investigation Continues The bankruptcy proceedings are unfolding alongside a criminal investigation led by the Dutch Fiscal Information and Investigation Service (FIOD). Investigators have searched company premises and seized digital devices, business records and remaining corporate assets as part of an inquiry into possible fraud, embezzlement or money laundering. No arrests had been announced as of mid-July. For customers, the immediate priority is the claims process. The court-appointed trustee will establish the procedure for filing claims, but the confirmed €7 million asset deficit means recoveries are likely to depend on the value of remaining assets and the outcome of the ongoing investigation, making full reimbursement uncertain.