Most Popular Crypto Exchanges in Germany 2024. What’s their que with The German Tax Office (BZSt)?

Crypto exchanges serve as the go-to platforms for purchasing cryptocurrencies in the crypto market. Just a few years back, approaching these exchanges required caution. The lack of regulation and instances of fraud had dampened their popularity.

Yet, things have drastically improved. Crypto exchanges have acknowledged these issues and are making concerted efforts to enhance security and user experience. In this regard, tax implications are one of the most disputed security concerns for them. 

Tax implications by The German Tax Office (BZSt) requires crypto investors to pay Income Tax on crypto activities such as short-term profits from selling, swapping, or spending crypto, as well as most other crypto income at a  fair market value of any coins in EUR the day you received them, keeping in mind the crypto exchanges shall adhere to these implications as well at the organisational level. 

Reporting these taxable crypto transactions in your annual tax return can be challenging since not all crypto exchanges make the necessary information easily accessible. Fortunately, some exchanges simplify the process. Here are the top 5 German crypto exchanges that can help you compare fees, products and provide the BZSt with the information they need about your transactions.

Bitstamp

Founded in 2011, Bitstamp is one of the world's earliest cryptocurrency exchanges, known for its competitive fees and user-friendly approach for beginners.

Pros:

• Low Fees: Bitstamp offers competitive fees starting at 0.4%, which decrease with higher trading volumes.

• Advanced Trading Features: The platform provides advanced options like limit orders and stop orders, giving traders more control.

• Customer Support: Bitstamp offers robust customer support through live chat and phone, ensuring users can get help whenever needed.

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Cons:

• Security Breach: Despite its strong reputation, Bitstamp experienced a security breach in 2015, leading to a loss of $5.2 million worth of Bitcoin.

• Limited Cryptocurrency Selection: Bitstamp offers fewer than 100 cryptocurrencies for trading, which is less than many other exchanges.

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Generate your crypto tax report with our step-by-step on how to connect your Bitstamp exchange to Kryptos! 

Coinbase

Coinbase is one of the world's largest crypto exchanges, renowned for its reliability and user-friendly platform for both beginners and experienced traders.

Pros:

• Perfect for Beginners: Coinbase provides an intuitive and seamless experience, making it easy for novice investors to navigate the world of crypto.

• Top-Notch Security and Compliance: Licensed by BaFin, Coinbase adheres to stringent German regulatory standards, ensuring high levels of security.

• Additional Features: Beyond buying, selling, and trading crypto, Coinbase offers staking, a Coinbase Card, and educational resources through its Learn and Earn program.

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Cons:

• Higher Fees: Coinbase's fees are on the higher side, especially for credit or debit card purchases and staking activities.

• Customer Service: While common in the industry, Coinbase's TrustPilot score reflects challenges in customer service, indicating room for improvement.

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For Coinbase users, we offer a simple guide to link your Coinbase exchange and Coinbase Wallet to Kryptos, making your tax reporting accurate and complaint.

Crypto.com

Crypto.com has quickly become a favourite among crypto enthusiasts, offering a broad range of cryptocurrencies and additional features like staking, DeFi, and crypto cards.

Pros:

• User-Friendly Experience: Crypto.com is known for its intuitive platform, making it easy for both beginners and experienced traders to navigate and trade.

• High-Level Security: The exchange prioritizes security, implementing robust measures to protect users' assets and personal information.

• Variety of Trading Options: Crypto.com caters to all types of traders with a wide range of trading options, including spot trading, derivatives, and DeFi products.

Cons:

• Limited Fiat Support: The platform has limited support for fiat currencies, which can be a drawback for users looking to trade with a wider variety of fiat options.

• Regulatory Challenges: Operating within a complex regulatory environment, Crypto.com and its users must stay updated on evolving regulations to ensure compliance.

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Want to simplify your crypto tax reporting? Our step-by-step guide will provide instructions on how to connect your Crypto.com to Kryptos.

Kraken

Kraken is a long-standing and reputable global crypto exchange offering a variety of products to meet the needs of all users.

Pros:

• Established Reputation: Known as one of the oldest crypto exchanges, Kraken has built a solid reputation and is well-regarded in the crypto community.

• Strong Security: Kraken uses robust security measures to ensure the safety of users' funds and personal information.

• Fiat Gateway: The platform supports a wide range of fiat currencies, making it easy for users to deposit and withdraw traditional currency.

Cons:

• Complex Interface: Kraken’s platform may pose a challenge for beginners due to its advanced trading features and somewhat complex interface.

• Limited Altcoins: While Kraken supports many popular cryptocurrencies, it offers fewer lesser-known altcoins compared to some other exchanges.

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Want to simplify your Kraken tax reporting? Our step-by-step guide shows you how to connect your Kraken account to Kryptos.

Nexo

Nexo, established in 2018 and based in Switzerland, caters to over 5 million users worldwide, making it a top choice for those interested in crypto lending and borrowing.

Pros:

• Crypto Loans: Nexo is well-known for its crypto loan products, allowing users to both borrow and lend crypto to earn interest.

• Competitive Fees: Nexo Pro offers low fees, ranging from 0.3% to 0.4%, making it an affordable option for investors.

• Rewards: Nexo provides opportunities to earn passive income through a variety of earning products, maximizing returns on crypto holdings.

Cons:

• Limited Crypto Selection: Nexo supports around 60 cryptocurrencies, which is fewer than what many other exchanges offer.

• Regulatory Challenges: While operating under EU regulations, Nexo has faced regulatory hurdles in other jurisdictions. Notably, it ceased operations in the US due to regulatory complexities.

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Generate your crypto tax report effortlessly by connecting your Nexo exchange to Kryptos with our detailed instructions.

Do Crypto Exchanges Report to the BZSt?

Yes, it’s likely that crypto exchanges share KYC data with the BZSt and other EU tax authorities. Under EU data sharing directives, crypto exchanges like Coinbase, Crypto.com must provide KYC data to tax authorities and other agencies upon request. 

Looking for a crypto tax solution? 

Kryptos is the answer. It connects with all the exchanges mentioned above and over 5000+ DeFi Protocols, along with numerous wallets and blockchains via API or by uploading a CSV file.

Once connected, Kryptos identifies your taxable and non-taxable transactions, calculates your profits, losses, income, and more, and presents it all in a clear tax summary.

To report your crypto transactions, you can file both the Annex SO (Other Income) and the main form ESt 1 A online through Elster. Your Kryptos Complete Tax Report provides all the details you need, including acquisition price, costs, disposal proceeds, and the fair market value of any additional income in EUR. Simply use these figures to complete your tax return forms.

Kryptos is free to use. You don’t need to pay a penny to download your crypto tax report. Sign up and try Kryptos for free today!