Knaken Bankruptcy Crypto Sale Yields $2.5M for Creditors

Dutch authorities liquidated seized Knaken assets for $2.5M, covering a fraction of the $12M-$14M user exposure amid ongoing legal scrutiny.

Woofun AI reports that Dutch prosecutors have liquidated cryptocurrencies confiscated from the insolvent platform Knaken, generating $2.5 million (2.2 million Euro) to distribute to creditors. Carl Hamm, the court-appointed trustee, confirmed that user investments ranged between $12 million and $14 million, making these proceeds the sole available funds from the bankruptcy estate. Knaken, which operated without proper licenses, ceased operations in early June and was declared bankrupt by the Rotterdam court on July 16.

Hamm detailed that Knaken charged a 1 Euro fee per 100 Euros invested in Bitcoin, holding the remaining 99 Euros in its own exchange account rather than securing actual crypto assets for users. While users' accounts displayed cryptocurrency balances, they effectively held Euro-denominated claims. A lawyer for an affected user challenged the prosecutors' authority to sell the assets, but authorities maintained the sales were permitted under regulations for depreciating seized items.