Dutch Prosecutors Seek Knaken Bankruptcy as 30,000 Bitcoin Users Lose Access

Crypto News

Dutch prosecutors have asked a Rotterdam court to declare crypto platform Knaken Cryptohandel bankrupt, a move that directly affects roughly 30,000 customers locked out of their Bitcoin (BTC) holdings since early June. The Public Prosecution Service framed the request as being in the public interest, citing serious concerns that the platform’s wind-down is not orderly. Knaken let users swap euros for Bitcoin, Ethereum and other altcoins, trade, and custody them — activities that require a license from the Dutch markets regulator, the AFM, under European rules. The official filing states Knaken never obtained that license. If the court agrees, a court-appointed trustee would assume control of the company’s assets.

The trustee mechanism is central to what happens next for affected users. Under Dutch insolvency procedure, a court-appointed administrator takes over the failed company’s estate and determines what can be returned to customers and other creditors. Prosecutors stressed they play no role in how the trustee handles repayment, keeping the civil insolvency track separate from any recovery plan. The concern driving the public-interest petition is concrete: the company has stopped paying customers out and has reportedly told some clients not to file damage claims. For account holders who can no longer reach assets held in their platform crypto wallet, the bankruptcy route is being presented as the most structured path to assessing and potentially recovering frozen balances.

Running parallel to the civil case is a criminal investigation led by the FIOD, the Dutch Fiscal Information and Investigation Service. The probe was triggered by warnings from the AFM and a formal complaint from the regulator into possible offenses. On Monday, investigators carried out searches at several premises, seized laptops and phones, and confiscated company assets. No arrests have been made so far. Prosecutors were careful to note that the civil bankruptcy petition and the criminal inquiry are handled by entirely separate teams, and that the two tracks should not be conflated. The asset seizures mark an escalation from regulatory warnings to active enforcement.

The licensing failure at the heart of the case underscores how Europe’s rulebook now treats unlicensed exchanges. Knaken operated for years offering Bitcoin and Ethereum (ETH) access without the AFM authorization that the EU’s crypto framework requires for swap, trading, and custody services. The AFM, which supervises the Netherlands’ financial markets, had flagged the platform before referring the matter onward. The prosecution’s use of a civil power to seek a company’s bankruptcy in the public interest is itself notable — it deploys insolvency law as an investor-protection tool rather than waiting solely on the criminal process to resolve.

The timing collides with a hard regulatory deadline. The Markets in Crypto-Assets regulation, or MiCA, the EU’s unified licensing regime for crypto-asset service providers, is tightening as a transition window that let firms keep operating under older national arrangements approaches its close on July 1. MiCA also imposes strict reserve and disclosure rules on stablecoins, including algorithmic stablecoins. Platforms across the bloc that have not secured authorization face a sharply narrowing runway, and the Knaken collapse offers an early, concrete illustration of the enforcement environment unlicensed operators are entering.

For customers, the immediate question remains how much of the frozen euro and crypto balances can ultimately be recovered, and on what timeline. That determination now rests with a trustee who has not yet been appointed, pending the court’s decision on the bankruptcy petition. Knaken has said it halted operations and entered a wind-down, but prosecutors’ public-interest intervention signals doubt that a self-managed closure would adequately protect creditors. The instruction reportedly given to some customers not to file damage claims further heightened official concern. Until the Rotterdam court rules, the roughly 30,000 affected account holders have no confirmed path to retrieving their assets.

Viewed together, these developments trace a single arc: Europe’s crypto market is moving from a permissive transition phase into strict, enforced licensing under MiCA, and the cost of operating outside it is now being demonstrated in real time. Our reading of the broader market backdrop reinforces the caution. COINOTAG’s aggregate data puts the Fear and Greed Index at 15 of 100, squarely in extreme fear, with Bitcoin dominance at 69.7% — far from the all-time-high era of altcoin enthusiasm — and total crypto market capitalization near $1.68 trillion. Against that risk-off mood, a high-profile licensing failure that strands 30,000 users is precisely the kind of trust shock that hardens the regulatory posture and accelerates the flight toward compliant, supervised platforms.