Dutch Prosecutors Search to Bankrupt Crypto Platform Knaken After Funds Frozen – Decrypt

Dutch prosecutors are attempting to pressure a collapsed crypto platform into chapter 11 to guard tens of hundreds of consumers locked out of their cash.

The Public Prosecution Service requested a court docket in Rotterdam to declare Knaken Cryptohandel and an affiliated entity, Stichting Knaken Funds, bankrupt, calling the transfer in “the general public curiosity.” Knaken has been offline since early June, leaving an estimated 30,000 clients unable to achieve their holdings.

The platform let customers swap euros for cryptocurrencies together with Bitcoin and Ethereum, in addition to commerce, and retailer digital property, actions that require a license from the Dutch markets regulator, the AFM, below the EU’s crypto guidelines. Knaken by no means obtained one.

The corporate says it has halted operations and is winding down, however prosecutors mentioned they’re “very involved” the method is not orderly. Knaken has stopped paying clients out and has reportedly advised them to not file injury claims.

Performing on warnings from the AFM, prosecutors used their civil energy to hunt an organization’s chapter within the public curiosity. If the court docket agrees, a court-appointed trustee would take over Knaken’s property and determine what might be returned to clients and different collectors. The prosecution service mentioned it performs no half in how a trustee handles that course of.

Operating alongside is a prison probe by the Fiscal Info and Investigation Service, or FIOD, into doable offenses, prompted by AFM alerts and a grievance from the regulator. On Monday, investigators carried out searches, seized laptops and telephones, and confiscated firm property. Nobody has been arrested. Prosecutors pressured that the civil and prison tracks are dealt with by separate groups.

Crypto corporations brace for MiCA

The case lands as Europe’s crypto licensing regime, MiCA, tightens. A transition interval that permit corporations maintain working below older nationwide guidelines expires July 1, after which platforms with out authorization can not legally serve EU clients, a squeeze analysts anticipate to skinny out a market by which solely round 200 corporations have secured full licenses. The Netherlands closed its personal grace interval a 12 months in the past.

Knaken had courted the mainstream as a sponsor of Dutch soccer golf equipment, together with Ajax, Feyenoord, and Sparta Rotterdam. These ties frayed effectively earlier than the collapse: Ajax dropped the corporate after two months, and Feyenoord ended its partnership final 12 months. In its 2024 annual accounts, Knaken described itself as ‘financially susceptible,’ in accordance with Dutch public broadcaster NOS.