Dutch Crypto Broker Knaken Declared Bankrupt After MiCA Breach

Dutch Crypto Broker Knaken Declared Bankrupt – MiCA Licensing Rules Leave 30,000 Customers Locked Out

Key Takeaways

• A Dutch court has declared crypto broker Knaken bankrupt for operating without a MiCA license.
• Approximately 30,000 customers have been locked out of their accounts since June 2026.
• Prosecutors estimate that around 7 million euros, about 8 million US dollars, are missing.
• Dutch authorities had enforced the EU MiCA licensing deadline on June 30, 2025.
• Customer crypto holdings are not covered by Dutch compensation schemes.

Dutch Court Declares Knaken Bankrupt After Licensing Breach

A Dutch crypto exchange operating under the name Knaken has entered bankruptcy following a court ruling in the Netherlands. The decision came after prosecutors argued that the company had continued operating without the required license under the European Union’s Markets in Crypto-Assets regulation, known as MiCA.

Knaken, a Rotterdam-based crypto broker, allowed users to buy, sell, and store cryptocurrencies. However, it never obtained authorization from the Dutch Authority for the Financial Markets, the AFM. Under MiCA, such a license is mandatory for crypto asset service providers operating within the EU.

The Netherlands enforced its MiCA licensing deadline on June 30, 2025, earlier and more strictly than some other EU member states. Knaken did not comply with this requirement. In June 2026, the platform went offline and customers were suddenly unable to access their accounts.

Dutch prosecutors filed a request for bankruptcy on June 30, citing halted payouts and risks to customers. The court approved the request and appointed an independent trustee to take control of the company and attempt to recover available assets.

Approximately 7 Million Euros Reported Missing

According to prosecutors, around 7 million euros, equivalent to about 8 million US dollars, have disappeared. Court documents indicate that the funds “disappeared without it being clear how this could have happened.” The exact circumstances surrounding the missing assets remain unclear.

The case affects an estimated 30,000 customers. Since the platform went offline, these users have been unable to access their crypto holdings or withdraw funds.

Dutch financial crime investigators from the Fiscal Information and Investigation Service, known as the FIOD, raided Knaken’s offices on June 29. Authorities seized computers and company assets as part of a criminal investigation. No arrests have been reported. The criminal investigation is being conducted separately from the bankruptcy proceedings.

MiCA Rules Require Segregation of Client Assets

The Markets in Crypto-Assets regulation establishes a harmonized framework for crypto service providers across the European Union. Among its requirements is the obligation for licensed firms to safeguard customer assets and keep them separate from company funds.

In the Netherlands, crypto assets do not receive automatic legal protection if a platform fails. The AFM has previously clarified that crypto firms typically use a separate legal entity, often structured as a foundation, to hold client assets apart from the company’s own balance sheet.

Knaken had set up such an entity, called Stichting Knaken Payments. This structure is intended to shield customer funds from creditors if the operating company collapses. However, this protection depends on the assets actually being present and properly segregated.

Under MiCA, licensed providers must ensure that client crypto holdings remain segregated and protected. If implemented correctly, those assets should remain outside the reach of company creditors during insolvency proceedings. The current case is testing how these requirements function in practice when a provider has not secured the required license.

Customers Face Limited Legal Safeguards

The bankruptcy highlights a key limitation for crypto users in the Netherlands. Unlike traditional bank deposits, crypto holdings are not covered by Dutch compensation schemes. If a crypto platform fails, customers cannot rely on a statutory deposit guarantee.

As a result, recovery efforts now depend entirely on what the court-appointed trustee can identify and reclaim from Knaken’s remaining assets. The process could take months, and the final outcome for customers remains uncertain.

For users, the distinction between regulated and unregulated providers becomes central in such cases. The MiCA framework was designed to create uniform standards across the EU, including licensing, capital requirements, and consumer protection measures. The Knaken case illustrates the consequences when a provider does not meet those requirements but continues operations.

It is also important to distinguish Knaken from Kraken, the US-based global cryptocurrency exchange. Despite the similarity in names, the two companies are unrelated and operate independently.

Regulatory Enforcement Intensifies in the Netherlands

The Dutch regulator has taken a strict approach to MiCA enforcement. The early implementation of the June 30, 2025 deadline signaled a clear expectation that crypto companies must comply with the new EU framework.

In 2025, Dutch regulators had already fined the exchange OKX over MiCA-related breaches. The action against Knaken represents a more severe outcome, culminating in bankruptcy proceedings and an ongoing criminal investigation.

For international users who compare crypto platforms, sportsbooks, or iGaming services that integrate crypto payments, regulatory status directly affects platform stability and access to funds. Licensing under MiCA is now a formal requirement for providers operating within the EU market.

Our Assessment

The bankruptcy of Knaken follows its failure to obtain a MiCA license required under EU law and enforced by the Netherlands as of June 30, 2025. Around 30,000 customers have lost account access, and prosecutors estimate that approximately 7 million euros are missing. Because Dutch compensation schemes do not cover crypto assets, recovery depends on insolvency proceedings and asset tracing by the appointed trustee. The case underscores the operational and legal impact of MiCA enforcement for crypto service providers and their users.