Dutch Prosecutors Sell Seized Crypto for €2.2M Amid Knaken Bankruptcy

Dutch prosecutors have sold approximately €2.2 million worth of cryptocurrency seized from Knaken, a bankrupt trading platform. The sale is intended to help repay creditors, who collectively face estimated claims ranging from €10 million to €12 million.

About 6,300 customers were affected by the bankruptcy, which was ordered by a Rotterdam court on July 16 after the Dutch Public Prosecution Service sought to have the company wound up in the public interest. The court found that Knaken did not have enough assets to repay users in full.

The seized cryptocurrency was sold because it was deemed at risk of losing value, according to Carl Hamm, a trustee appointed to oversee the estate. The sale has raised questions about ownership, with one lawyer representing an affected customer arguing that the situation is akin to a garage holding someone else's vehicle and then selling it without their consent.

Knaken owner Ronald J. disputes claims that customer funds broadly went uninvested, stating that every customer order was recorded through a liquidity provider and that most positions were backed, although he acknowledges an uncovered portion existed.