The Dutch prosecution has sold the seized encrypted assets of Knaken, the bankruptcy transaction platform, for a sum of 2.2 million euros. Currently, the funds are the only cash available for the liquidation of property, but the client claims facing the platform are estimated to amount to Euro10 million to Euro12 million.
Client claims are much higher than existing assets
The Court-appointed trustee Carl Hamm indicated that he had contacted approximately 6300 former clients and reminded them to lower expectations. According to his estimates, the total amount of the client ' s funds in the Knaken account is about 10 to 12 million euros, which is currently only 2.2 million euros.
Hamm also stated that Knaken may not hold sufficient encrypted assets to match the account balance of the client. Clients can see currency balances in their accounts, but many think that they are held directly.
Litigation over the funding of the Platform
Hamm explained that after the purchase of bitcoin by the client, the platform would charge Euro1 and buy Euro99 through its counterparty. According to him, this portion of the encrypted assets belonged legally to Knaken and the customer received a corresponding euro claim.
Ronald J., the head of Knaken, denied that the client's funds were widely inactive. He indicated to Rijnmond that the company was a brokering model and that each order recorded the order number, the sale price and the time stamp. He admitted that part of the client exposure was not covered.
It stopped before bankruptcy, and the regulatory issues are still fermenting.
Knaken ceased operations in early June and subsequently entered into insolvency proceedings in July. The Dutch prosecution had previously stated that the whereabouts of approximately 7 million euros of customer funds could not be verified, while the Rotterdam court had found that the company ' s assets were insufficient to pay the user in full.
The platform was also under financial pressure because 23 BTCs were killed by hacker attacks in 2020. The court also informed that Ronald J. had also transferred approximately 2.3 million euros from Knaken to another company under his control, giving rise to a conflict of interest challenge. He claims that the entity was created for marketing purposes.