Dutch crypto exchange collapses exposing customer balances’ true value amid multi-million-euro hole
Dutch crypto exchange Knaken and its payments foundation entered court-controlled bankruptcy after the Rotterdam District Court found the firm could not repay customers in full. Prosecutors said about €7 million was missing from customer balances, while customers had been locked out and the shortfall had not been properly disclosed. A trustee now controls both Knaken Cryptohandel B.V. and Stichting Knaken Payments, replacing management’s proposed payout process. Knaken had argued for an independent verification and self-run distribution, but the court rejected that option. The bankruptcy process must now reconcile platform ledgers, wallets, bank accounts, and any seized assets to determine what property exists, who owns it, and whether client assets were truly segregated. Separately, the FIOD is investigating possible criminal conduct; searches and asset seizures do not imply guilt. The case highlights that Dutch crypto custody via foundations does not automatically protect customers, especially without MiCA-compliant safeguards, accurate records, and authorized custody arrangements. Recovery will depend on what assets the trustee can trace and recover.
