The Dutch Public Prosecution Service (OM) has formally requested that a court declare the cryptocurrency platform Knaken bankrupt.
The move follows the company's decision to stop all business activities at the end of May and its subsequent failure to process customer withdrawals.
According to reports from Het Financieele Dagblad and De Telegraaf, the prosecution argues that the company is insolvent and unable to meet its financial obligations to clients.
The request for bankruptcy is a procedural step to appoint a curator who will oversee the liquidation of assets and determine the recovery prospects for affected users.
Knaken had ceased operations abruptly in late May, leaving customers unable to access their funds.
The halt in withdrawals triggered immediate concern among retail investors who had deposited capital on the platform.