Kraken's US Stock Trading Expansion Stirs Tax Complexity for European Investors

Crypto exchanges are now offering US stock trading to customers in the European Economic Area (EEA), including Germany. Kraken, one of the largest crypto exchanges, started offering over 7,000 US stocks to its EEA customers on August 18, 2026, along with more than 600 crypto assets and over 700 'xStocks'. Trading in these shares is commission-free, but further costs such as spreads and currency conversion charges may apply.

The key issue for German investors is the withholding of capital gains tax. Since the investment services are provided by a Cypriot company, Payward Europe Digital Solutions (CY) Limited, which is authorised under the European Markets in Financial Instruments Directive and supervised by CySEC, the securities account sits in Cyprus. This means that no one withholds German capital gains tax on behalf of investors.

This affects how taxes are handled for these investments. Dividends and sale proceeds are credited to investors gross, without any withholding tax, and the settlement with the tax office runs entirely through the income tax return. Investors must now declare taxable investment income that has not been subject to capital gains tax in their income tax return.