Prosecutors push Dutch crypto platform into bankruptcy court to protect investors

The Dutch Public Prosecution Service (OM) has asked the court in Rotterdam to declare crypto platform Knaken Cryptohandel B.V. and its affiliated Stichting Knaken Payments bankrupt. The OM says the move is in the public interest to protect investors after the platform halted customer access to funds. The request follows warnings from the Dutch Authority for the Financial Markets (AFM) and an ongoing investigation by the Fiscal Information and Investigation Service (FIOD).

The OM said Knaken allowed customers to convert euros into cryptocurrencies such as bitcoin and etherium. Customers could also trade crypto and store digital assets on the platform. Under new European crypto rules, the company needed a license from the AFM. It did not obtain that license.

Knaken has been offline since early June. Customers have not been able to access their crypto holdings since then. The company has said it stopped its activities and was working on winding down operations.

The OM said it is concerned that this winding-down process is not being handled properly. The company has stopped paying out customers and told them not to file damage claims. Authorities estimate that about 30,000 customers are affected.

The prosecution service is requesting bankruptcy “in the public interest.” It said this is meant to ensure an orderly settlement of the situation. If the court approves the request, a trustee will review the company’s assets. The trustee will determine what can be returned to customers and other creditors.

In early June, Knaken wrote: “We are currently investigating how we can shape the settlement with our customers.”

The FIOD is conducting a separate criminal investigation into possible offenses related to the company. The investigation follows signals from the AFM and a report by the regulator.

On Monday, June 29, investigators carried out multiple searches. They seized laptops and mobile phones. They also confiscated company assets. No arrests have been made.

The OM stressed that the bankruptcy request is separate from the criminal investigation. Different teams within the prosecution service are handling the two processes. The OM also said it does not oversee how a trustee handles bankruptcy proceedings.

Knaken was known as a sponsor of Dutch Eredivisie football clubs, including Ajax, Sparta Rotterdam, and Feyenoord. Ajax ended its contract with the company after two months and switched to a competitor. Feyenoord ended its partnership last year. In its 2024 annual report, Knaken said it was financially vulnerable.