Prosecutors sell remaining crypto from bankrupt trading site Knaken for €2.2 million
The Dutch Public Prosecution Service has sold the remaining cryptocurrency held by the bankrupt crypto platform Knaken. The move generated 2.2 million euros that will go toward paying creditors, according to the court-appointed trustee, Rijnmond reports.
Rotterdam trustee Carl Hamm, appointed after the company’s collapse, has told about 6,300 customers in a recent message that they should temper expectations of recovering their money. “We have contacted everyone who had a position at Knaken in the recent past,” Hamm said in an interview with Rijnmond.
Hamm estimates customers invested 10 million to 12 million euros through Knaken. Those affected include not only people who put money into cryptocurrencies, but also those who bought Knaken certificates and those who lent money to the company.
What happened to the customers’ funds is under investigation by both the trustee and prosecutors. Customers told Rijnmond they each had their own account and wallet on the Knaken platform that they could monitor through the company’s app. When they transferred money, they could see in real time how much crypto it represented and its value. The platform also offered a digital vault for savings.
Hamm said it appears Knaken did not actually invest all the money that customers believed was going into cryptocurrency. “It seems that did not happen. There is a large gap between what was invested and what was put into cryptocurrency,” he told Rijnmond. “The investments and the normal business costs long ended up in one pot, and considerable losses were made.”
Hamm described the process this way: A customer wanting to invest 100 euros in bitcoin would pay a 1-euro fee to Knaken, which then bought a 99-euro stake in bitcoin on a crypto exchange. That stake belonged to Knaken, not the investor.
Knaken recorded a crypto amount in the customer’s account, but the customer only had a right to the euro equivalent. Many customers believed they owned the cryptocurrency themselves, Hamm said, but that was not the case. Knaken also apparently did not hold the cryptocurrency corresponding to the amounts listed in customer accounts, creating a large shortfall.
Court records from the bankruptcy filing reportedly show that Knaken owner Ronald J. transferred 2.3 million euros from the company’s account to a private limited company he controlled. The court described the transaction as a form of conflict of interest.
Problems reportedly began in 2020, when 23 bitcoins were stolen in a hack. Ronald J. said the theft caused millions in losses. However, the bitcoin price at the time meant the stolen coins were worth about 140,000 euros, not millions.
Despite the earlier losses, Ronald J. continued attracting new customers and signed sponsorship deals with Dutch football clubs Feyenoord, Sparta, Heracles, Heerenveen, and, briefly, Ajax.
A customer identified only as Henk, who first reported problems to Rijnmond at the end of May, said, "If those clubs go into business with such a party, then you think it’s fine. So not, it turns out. I find that really scandalous.”
Knaken then reportedly continued selling certificates and accepting loans from customers while failing to report its financial problems to the Dutch central bank, De Nederlandsche Bank. A former Knaken director who is not Ronald J. was allegedly asked not to make contact. The court declared Knaken bankrupt on July 16, citing the financial problems, among other factors.
Shortly before the bankruptcy, prosecutors seized the remaining cryptocurrency and ordered it sold, producing the 2.2 million euros.
The sale appears based on Article 117 of the Dutch Code of Criminal Procedure. The law allows the sale of seized goods that are subject to depreciation.
Hamm said he understood the decision: “The value of cryptocurrency is completely unpredictable. Suppose that currency was not sold and became less valuable,” he said, “then the problem would have been even bigger.”
The 2.2 million euros is currently the only money in the bankruptcy estate. “We are looking to see if more can be made of it, if there is still money elsewhere or people still owe money to Knaken or if there are still possessions that can be sold,” Hamm said.
Customers still have time to submit claims with supporting evidence to the trustee. Hamm must also determine whether Knaken’s director complied with applicable rules. Prosecutors are investigating possible criminal offenses.
Ronald J. is still seeking a settlement with creditors that could speed the bankruptcy process. “We will see if something comes of that,” Hamm told the newspaper.
In response to Hamm’s comments, Ronald J. said he is working on a creditors’ agreement. “I still want to do what I planned. Make customers a proposal, with which they hopefully agree.”
He rejected several of Hamm’s statements. On the 10 million to 12 million euro figure, Ronald J. told Rijnmond, "I don’t recognize the amount, and I can’t pay it. I also don’t know how this amount is composed.”
Knaken operated as a broker, he said. “A customer gave a buy order; that order was executed against the then applicable price, and the customer got the corresponding position in his account. There was no collective result that was shared.”
He called Hamm’s suggestion that the money was not actually invested in cryptocurrency “outright incorrect and damaging.” “Every order placed via Knaken is executed at our liquidity provider and is provided with an order ID with the executed price level and timestamp. That administration is complete, and per order, it can be checked against the customer order in the system,” Ronald J. told Rijnmond.
He did not deny a shortfall but disputed any link between that shortfall and claims that cryptocurrency was not purchased. “Those two things stand separate. The purchases are executed and documented,” he said.
Funds did not always go into a single Knaken account. “This is incorrect for the period from November 2022. From that moment Knaken had a separate IBAN exclusively for customer funds. From 2025, incoming customer funds were deposited on the account of a foundation established for that. This separation can be unambiguously established from the bank administration and the statutes of the foundation.”
Knaken held positions for customers in about 145 different cryptocurrencies, he said. “For the vast majority of those, the positions noted in customer accounts were fully covered by actually held crypto. I thus do not deny that there was an uncovered part. What I dispute is the generalization.”