A Dutch court has declared crypto exchange Knaken insolvent after uncovering an undisclosed financial deficit, meaning the platform cannot fully repay its customers. The ruling appoints an independent trustee to oversee the recovery process and determine how remaining assets will be distributed among affected users. The case highlights the gap between the balances customers believed they held and the actual funds available at the exchange, raising renewed concerns about transparency and reserve backing at smaller trading platforms. With a multi-million-euro hole in its accounts, Knaken joins a list of crypto firms whose failures have left retail users exposed to losses. The trustee will now assess claims and manage what can be salvaged, though the timeline and scale of any repayments remain uncertain. Customers face potential shortfalls as the insolvency proceedings advance under court supervision.
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