The collapse of Dutch cryptocurrency platform Knaken has raised fresh concerns about the safety of custodial crypto services after millions in customer funds went missing. Authorities have placed both Knaken Cryptohandel BV and its affiliated customer protection foundation into bankruptcy, leaving roughly 30,000 account holders unable to access their assets.
The case has intensified scrutiny because customer funds reportedly disappeared despite a structure designed to safeguard deposits during financial distress. Additionally, prosecutors have launched a criminal investigation as regulators seek to determine what happened to the missing money.
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Court Orders Bankruptcy Amid Missing Funds
The Rotterdam District Court approved the bankruptcy petitions after prosecutors argued that Knaken could no longer protect customer interests. Investigators believe approximately €7 million, or nearly $8 million, in customer funds cannot be accounted for. Consequently, users remain locked out of their accounts while administrators begin the liquidation process.
Moreover, the court determined that customers lacked sufficient information to pursue legal action independently. Authorities also concluded that the company stopped meeting its financial obligations after restricting platform access.
High-Profile Sponsorships End in Financial Crisis
Knaken previously gained widespread recognition through sponsorship agreements with Dutch football giants Ajax and Feyenoord. However, those partnerships now contrast sharply with the company’s financial collapse and ongoing criminal investigation.
Besides examining the missing funds, officials will oversee the distribution of any remaining assets to creditors and customers. The bankruptcy of the affiliated protection foundation has further complicated recovery efforts because it was intended to shield customer deposits.
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