Knaken creditors face losses after €2.2M crypto sale

Dutch prosecutors sold the remaining cryptocurrency seized from failed trading platform Knaken for €2.2 million, giving the bankruptcy estate its first known pool of funds for creditor claims. Court-appointed trustee Carl Hamm told regional broadcaster Rijnmond that the proceeds were currently the estate's only available money. He warned that thousands of customers should limit their expectations of recovering their full balances.

The sale followed Knaken's bankruptcy on July 16. Prosecutors are conducting a criminal investigation into possible offenses connected with the platform's finances. Hamm is separately reviewing its assets and liabilities.

Hamm contacted about 6,300 people who had held positions on Knaken in the recent past. His estimate places the total amount invested at between €10 million and €12 million, spanning cryptocurrency positions and customer loans. The €2.2 million from the asset sale covers only part of that estimate before bankruptcy costs and the treatment of different creditor classes. Hamm has not published a projected recovery percentage or a distribution date.

Crypto.news previously reported that a Rotterdam court declared Knaken bankrupt after prosecutors alleged €7 million was missing. The official court summary said the company lacked enough assets to repay customers fully. The court also found that customers could no longer access their accounts or balances after Knaken blocked access to its trading platform. Prosecutors filed the bankruptcy request on June 30 in the public interest because customers lacked enough information to assess their legal positions.

Hamm said customers appeared to hold claims against Knaken for euro values rather than direct ownership of cryptocurrency stored in individual wallets. He also alleged that Knaken did not purchase enough crypto to cover all positions shown in customer accounts. The trustee said customer investments and ordinary business costs had entered a common pool before losses accumulated. His investigation has not produced a final public accounting of how much crypto was purchased or how the shortfall developed.

Knaken owner Ronald J. rejected the broader allegation. He said each customer order was executed through a liquidity provider and could be verified with a unique order identifier. "Every order placed via Knaken is executed at our liquidity provider," Ronald J. said, calling the trustee's account "outright incorrect and damaging."

Ronald J. did not deny that Knaken had an uncovered portion. He disputed the suggestion that customer orders generally went unfilled and said positions in most of the roughly 145 supported cryptocurrencies had matching assets. He also challenged Hamm's €10 million to €12 million estimate, saying he did not recognize the amount or understand how it was calculated.

The trustee's review and criminal investigation remain active, meaning neither side's full accounting has received a final judicial determination.

Prosecutors seized Knaken's remaining cryptocurrency shortly before the bankruptcy and later ordered its sale. Hamm supported the decision because crypto prices can move sharply while insolvency proceedings continue. The reported legal basis was Article 117 of the Dutch Code of Criminal Procedure, which allows authorities to sell seized property when its value may deteriorate. The proceeds can then be preserved in euros while ownership and creditor rights are resolved.