Dutch prosecutors have liquidated all remaining cryptocurrency assets belonging to the bankrupt trading platform Knaken, collecting $2.55 million to be distributed to creditors, officials confirmed. However, the court-appointed trustee has warned that the platform's 6,300 affected customers are likely to recover only a small portion of their investments.
Carl Hamm, the trustee overseeing the Rotterdam-based company, stated that customers had invested between $11.6 million and $13.9 million through Knaken before the district court declared the company bankrupt on July 16. The financial collapse resulted in significant losses for retail investors, bondholders, and creditors.
"We have sent letters to everyone who had accounts with Knaken in the recent past," Hamm said in an interview.
The Dutch Public Prosecution Service and the trustee are conducting parallel investigations into the handling of client funds. According to affected individuals who spoke with the local broadcaster Rijnmond, Knaken promised individual user accounts and digital wallets accessible via a mobile app. Clients were shown real-time tracking of their fiat deposits and corresponding cryptocurrency valuations, and digital storage for savings was advertised.
However, bankruptcy proceedings data indicates that the platform operated with a significant structural deficit rather than providing full coverage for user deposits.
"It seems that did not happen. There is a large gap between what was invested and the cryptocurrency in the accounts," Hamm said. "Investments and ordinary operational expenses were mixed on a single account for a long time, leading to substantial losses."
Court documents submitted during the bankruptcy hearing show that Knaken's owner and managing director, Ronald J., transferred $2.67 million from company accounts to a private organization owned by him. The court characterized this transaction as "a form of conflict of interest."
Insolvency documents indicate that Knaken's financial problems began as early as 2020 following an alleged security breach involving 23 bitcoins. Ronald J. claimed this incident led to millions in losses; however, historical market prices show that 23 bitcoins were worth approximately $162,000 at that time, contradicting the claims of multi-million-dollar losses incurred solely from this hack.
Despite worsening financial difficulties, Knaken continued to expand its customer base and secured high-profile sponsorship deals with major Dutch professional football clubs, including Feyenoord, Sparta Rotterdam, Heracles Almelo, SC Heerenveen, and, briefly, Ajax.
The platform also continued to issue participation certificates and attract loans from clients without disclosing its financial troubles to the Dutch Central Bank.
"When clubs enter a partnership with such a party, you assume everything is legitimate. It turned out not to be. I think it's truly shameful," said Henk, a Knaken client who reportedly first flagged irregularities on the platform in late May.
Prior to the bankruptcy declaration, Dutch law enforcement seized and sold Knaken's remaining cryptocurrency reserves under Article 117 of the Dutch Code of Criminal Procedure, which permits the liquidation of seized assets subject to rapid depreciation.
The sale raised $2.55 million, which currently constitutes the only liquid asset in the bankruptcy estate. A legal advisor representing the victims questioned whether law enforcement overstepped their authority by liquidating client assets, drawing a comparison to a car repair shop selling a customer's car during a company bankruptcy.
Director Resists and Seeks Settlement
Trustee Hamm defended the prosecution's decision, citing the extreme volatility of cryptocurrency assets. "Imagine if these cryptocurrencies had not been sold and had lost value," Hamm said. "The deficit would be even greater."
Regarding regulatory oversight, representatives from the Dutch Central Bank confirmed that during the period in question, the bank's authority was strictly limited to compliance supervision—focusing on anti-money laundering and counter-terrorist financing—rather than financial stability oversight. Subsequently, primary supervisory authority was transferred to the Authority for the Financial Markets during the 2024–2025 transition period.
Meanwhile, in a detailed response, Knaken director Ronald J. contested key claims made by the trustee, although he acknowledged an overall asset deficit. He disputed the figures provided by Hamm, clarifying that Knaken functioned as an order-execution-only broker, directly linking orders with liquidity providers.
"Every order placed through Knaken was executed by our liquidity provider and has an order ID with execution prices and timestamps," said J., asserting that the trade logs are complete and verifiable against client account records.
Addressing allegations of commingling funds, J. stated that separate banking structures were created. According to J., Knaken introduced a dedicated customer IBAN in November 2022 and, as of 2025, began transferring incoming client funds to a separate foundation account. He claimed that positions for most of the 145 cryptocurrencies offered were fully covered, though he acknowledged that a portion remained unsecured.
Regarding the $2.67 million transfer to a secondary private organization, J. explained that this structure was specifically created for marketing purposes to prevent operational duplication and ensure regulatory compliance. Financial statements provided by J. to local media did not indicate personal enrichment or direct withdrawal of salaries from these funds. He added that investors holding certificates of goSettle B.V. retain a participation stake in an organization not included in the bankruptcy estate.
Ronald J. confirmed that he is actively developing a creditor arrangement plan to expedite a settlement. "I still want to do what I intended: offer clients an option that they will hopefully accept," said J. Trustee Hamm noted that while formal claims are currently being filed, the feasibility of any proposed settlement is still under assessment.
