Knaken Bankruptcy Leaves 30,000 Crypto Users Waiting as MiCA Rules Take Effect

Dutch cryptocurrency broker Knaken has officially entered bankruptcy, leaving around 30,000 customers uncertain about the fate of their digital assets. Despite its similar name, Knaken has no connection to U.S.-based cryptocurrency exchange Kraken, which continues to operate independently. Knaken was a Rotterdam-based crypto broker that offered services for buying, selling, and storing cryptocurrencies before shutting down.

The company’s collapse followed its failure to secure a license from the Dutch Authority for the Financial Markets (AFM), a requirement under the European Union’s Markets in Crypto-Assets (MiCA) regulation. The Netherlands became one of the first EU countries to strictly enforce MiCA licensing rules, setting a compliance deadline of June 30, 2025. Knaken did not obtain the required authorization and ceased operations in June 2026.

Dutch prosecutors petitioned the court to declare Knaken bankrupt on June 30, arguing that customer withdrawals had stopped and users faced increasing financial risks. While Knaken maintained that bankruptcy was unnecessary and insisted customer funds remained secure, the court ruled otherwise and appointed an independent trustee to oversee the company's remaining assets and attempt to recover funds for creditors.

The case has also raised concerns about investor protection under MiCA. Dutch law does not automatically safeguard crypto assets when a platform fails. Instead, crypto firms are expected to separate customer assets through an independent legal structure. Knaken created such an entity, Stichting Knaken Payments, but that arrangement only provides protection if customer assets are fully preserved.

Authorities are also conducting a separate criminal investigation. The Dutch Fiscal Information and Investigation Service (FIOD) raided Knaken’s offices on June 29, seizing computers and company assets. No arrests have been announced, and the investigation remains independent of the bankruptcy proceedings.

For customers, the recovery process could take months with no certainty of reimbursement. Unlike traditional bank deposits, cryptocurrency holdings are not covered by Dutch compensation schemes, meaning any repayment will depend on what the trustee can successfully locate and recover. The Knaken bankruptcy serves as another reminder of the risks associated with centralized crypto platforms and the importance of understanding regulatory compliance under MiCA.