Dutch cryptocurrency platform Knaken has been declared bankrupt by a court in Rotterdam after prosecutors said nearly 7 million euros in customer funds were unaccounted for.
Summary
- Crypto exchange Knaken was declared bankrupt after prosecutors alleged 7 million Euros in customer funds disappeared.
- The Rotterdam court said that Knaken did not have enough assets to pay customers in full after the suspension.
- The fall of Knaken follows the implementation of MiCA, which now prevents unlicensed crypto firms from serving customers in the EU.
The decision follows a bankruptcy petition filed by the Netherlands Public Prosecution Service in late June after regulators raised concerns about the company.
According to NL Times, the Dutch Authority for the Financial Markets notified prosecutors of what it described as a “highly concerning situation” at Knaken. A criminal investigation into the alleged loss of customer funds is ongoing.
The court said that Knaken had a major flaw that users were not told about.
“A large amount of customer money has disappeared without it being clear how this happened,” said the court.
The platform was already offline in early June, leaving customers unable to access their accounts through its website.
Knaken opposed the bankruptcy filing and said other legal options could protect customers. The company identified the assets seized by the Financial Intelligence and Investigation Service and proposed to distribute the proceeds directly to users. However, the court overturned that plan after finding that Knaken did not have enough assets to pay customers in full.
The fall of Knaken comes as MiCA is reshaping the European crypto market
The bankruptcy comes shortly after the European Union completed the transition to markets in the Crypto-Assets framework. Under the new regime, crypto service providers need to be approved by the EU regulator to continue providing covered services across the board. The Netherlands completed its national transition period earlier, and the wider MiCA transition ended on July 1, 2026.
Knaken had previously operated as a Dutch crypto services provider but was not listed among the firms approved under the new MiCA program at the time of its collapse. The AFM states that companies offering integrated crypto services in the Netherlands must have a license or valid notification from the EU regulator.
The broader market has been moving quickly for licensed providers. As crypto.news previously reported, firms without MiCA approval had to shut down and cover EU services after the July 1 deadline while protecting customers in the process. The EU had issued 244 MiCA licenses on June 29.
Meanwhile, licensed companies including Coinbase and Ripple have expanded across Europe as other platforms cut services after failing to obtain permits. This change has increased the divide between regulated operators and companies that cannot meet the new licensing requirements.
Knaken’s bankruptcy now leaves a court-appointed process to determine how much money and crypto can be returned to creditors and customers. Prosecutors continue to investigate the alleged missing 7 million euros, while information available to the public does not yet explain where the missing funds went.
