Dutch Prosecutors Raise $2.55M From Crypto Tied to Bankrupt Knaken

Discrepancy Between Deposits and Assets

Dutch prosecutors person liquidated each remaining cryptocurrency assets held by bankrupt trading level Knaken, raising $2.55 cardinal to wage creditors, officials confirmed. However, the court-appointed bankruptcy trustee warned that the platform’s 6,300 affected customers are apt to retrieve lone a fraction of their investments.

Carl Hamm, the bankruptcy trustee overseeing the Rotterdam-based company, reported that clients invested betwixt $11.6 cardinal and $13.9 cardinal done Knaken earlier the territory tribunal declared the steadfast bankrupt connected July 16. The fiscal illness has near retail investors, noteholders, and lenders facing terrible shortfalls.

“We person written to everyone who held a presumption with Knaken successful the caller past,” Hamm said successful an interview.

The Dutch Public Prosecution Service and the trustee are conducting parallel investigations into the handling of lawsuit funds. According to victims who spoke with section broadcaster Rijnmond, Knaken promised individualized idiosyncratic accounts and digital wallets accessible via a mobile application. Customers were shown real-time tracking of their fiat deposits and corresponding cryptocurrency valuations, alongside a integer vault advertised for savings.

However, insolvency proceedings suggest the level operated with important structural deficits alternatively than maintaining afloat backing for idiosyncratic deposits.

“It appears that did not happen. There is simply a ample spread betwixt what was invested and the cryptocurrency connected deposit,” Hamm said. “Investments and mean operating expenses were commingled into a azygous relationship for a agelong time, resulting successful important losses.”

Court records from the bankruptcy proceeding uncover that Knaken proprietor and managing manager Ronald J. transferred $2.67 cardinal from institution accounts to a backstage entity helium owned. The tribunal characterized the transaction arsenic “a signifier of struggle of interest.”

Insolvency documents bespeak that Knaken’s fiscal troubles began arsenic aboriginal arsenic 2020 pursuing an alleged information breach involving 23 bitcoins. Ronald J. claimed the incidental resulted successful millions successful losses; however, humanities marketplace prices amusement 23 bitcoins were worthy astir $162,000 astatine the time, contradicting claims of a multi-million-dollar nonaccomplishment from the hack alone.

Despite mounting fiscal distress, Knaken continued expanding its lawsuit basal and pursued high-profile sponsorship agreements with large Dutch nonrecreational shot clubs, including Feyenoord, Sparta Rotterdam, Heracles Almelo, SC Heerenveen, and concisely Ajax.

The level besides continued issuing information certificates and soliciting lawsuit loans without disclosing its fiscal distress to the Dutch cardinal bank.

“When clubs spouse with a enactment similar that, you presume everything is legitimate. It turns retired it wasn’t. I deliberation it is genuinely disgraceful,” said Henk, a Knaken lawsuit who reportedly archetypal flagged level irregularities successful precocious May.

Before the bankruptcy declaration, Dutch instrumentality enforcement seized and sold Knaken’s remaining cryptocurrency reserves nether Article 117 of the Dutch Code of Criminal Procedure, which permits the liquidation of seized assets taxable to accelerated depreciation.

The merchantability generated $2.55 million, presently the sole liquid plus successful the bankruptcy estate. Legal counsel representing victims questioned whether instrumentality enforcement exceeded its authority by liquidating lawsuit assets, drafting comparisons to a store selling a customer’s conveyance during firm bankruptcy.

Director Pushes Back and Seeks Settlement

Trustee Hamm defended the prosecution’s decision, noting the utmost volatility of crypto assets. “Imagine if those currencies had not been sold and had mislaid value,” Hamm said. “The shortage would person been adjacent greater.”

Regarding regulatory supervision, Dutch cardinal slope officials confirmed that during the play successful question, the bank’s mandate was strictly constricted to integrity oversight—focusing connected anti-money laundering and counter-terrorist financing—rather than prudential fiscal stability. Primary oversight was subsequently transferred to the Authority for the Financial Markets during the 2024–2025 regulatory transition.

Meanwhile, successful a elaborate response, Knaken Director Ronald J. disputed cardinal assertions made by the trustee portion acknowledging an wide plus shortfall. He disputed the figures cited by Hamm, explaining that Knaken functioned arsenic an execution-only broker connecting orders straight to liquidity providers.

“Every bid placed done Knaken was executed with our liquidity supplier and bears an bid ID with executed terms levels and timestamps,” J. said, asserting that commercialized logs are implicit and verifiable against lawsuit relationship entries.

Addressing allegations of money commingling, J. stated that abstracted banking structures were instituted. According to J., Knaken introduced a dedicated lawsuit IBAN successful November 2022 and transitioned incoming lawsuit funds to a abstracted instauration relationship starting successful 2025. He maintained that positions successful the bulk of the 145 cryptocurrencies offered were afloat backed, though helium acknowledged that a information remained unbacked.

Regarding the $2.67 cardinal transportation to a secondary backstage entity, J. argued the operation was established specifically for selling purposes to debar operational overlap and comply with regulatory guidelines. Financial records provided by J. to section media indicated nary idiosyncratic enrichment oregon nonstop wage gully from those funds. He added that investors holding certificates successful goSettle B.V. clasp equity successful an entity extracurricular the bankruptcy estate.

Ronald J. confirmed helium is actively formulating a creation program for creditors to accelerate settlement. “I inactive privation to bash what I intended: connection customers a connection that they volition hopefully accept,” J. said. Trustee Hamm noted that portion ceremonial claims are presently being filed, the feasibility of immoderate projected colony remains nether evaluation.