Rotterdam Court Appoints Trustee After Finding Exchange Cannot Repay Customers
The Rotterdam District Court placed Knaken Cryptohandel B.V. and its affiliated Stichting Knaken Payments into court-controlled bankruptcy on July 16, appointing trustee C.F.W.A. Hamm after determining the exchange could not repay customers in full.
The Dutch Public Prosecution Service identified approximately €7 million missing from customer balances. Customers had been locked out of the platform and payments had stopped before the formal bankruptcy filing.
Knaken had not obtained the required authorization from the Dutch Authority for the Financial Markets (AFM). The insolvency comes as the Markets in Crypto-Assets Regulation (MiCA) deadline for crypto service providers passed on July 1.
Knaken’s Rejected Proposal
Knaken had argued that bankruptcy was unnecessary. The exchange contended that criminal asset seizures, the service shutdown, and its custody structure already protected customers. Knaken proposed an independent verification process followed by its own distribution protocol, but the court rejected this approach and appointed an outside trustee instead.
The Fiscal Intelligence and Investigation Service (FIOD) carried out searches on June 29, seizing digital data carriers and company assets. Prosecutors stated on June 30 that no arrests had been made.
Bankruptcy Process and Regulatory Framework
Under Dutch law, the bankruptcy trustee will inventory assets and claims, examine records, protect and liquidate the estate, and propose distributions according to claim priority. However, neither the court nor prosecutors have disclosed which Knaken assets remain or where they are held.
De Nederlandsche Bank, the Dutch central bank, stated that crypto-assets fall outside the Dutch investor compensation scheme. Dutch law contains no automatic statutory segregation regime for custodied crypto comparable to protections for securities held by banks, creating a significant gap in customer safeguards.
The legal treatment of seized property and its coordination with the bankruptcy estate between civil and criminal processes remains unclear.
