Tokenized stocks: Why you don't actually own shares, and what risks do the issuers bear

On August 12, 2026, Crypto.com launched a product in the European Economic Area that looks like buying stocks, but legally it is something completely different.

The product is called "Tokenized Shares," which according to the company covers 1500 U.S. stocks and funds and runs 24/7 in its own application. Germany belongs to the European Economic Area, so this product is also for you.

The supplier's announcement contained one sentence that summed up the whole thing: investors did not obtain legal or beneficial ownership of the underlying assets, nor did they obtain any shareholder rights attached to them. Anyone who wants to trade stocks through a crypto app is not buying shares in a company, but a contract about its price. This structure now appears in several large trading venues. This article explains what you hold, who supports it, and how to identify true ownership of the security.

Tokenized shares are derivatives, not company shares

Shares are a share of the company's share capital. What follows are the rights of members: the right to vote at the annual shareholders 'meeting, the right to request profit sharing, the right to subscribe when capital increase, and the right to know. People who hold shares in securities accounts own shares in the company, even if custody is conducted through banks and central securities depositories.

A tokenized stock is a record on the blockchain that points to the price of the stock. The issuer promises to align the value of the token with the price of the underlying asset and redeem it at the current price. Legally speaking, this is a derivative, a claim on a company. The underlying assets are clearly not in your asset range.

Why boundaries become blurred in daily use

Interface design causes confusion. The app displays the ticker symbols of well-known companies, next to real-time prices, and below the buy button. Instructions on the legal nature only appear in the product description document and you must confirm it but do not need to read it.

Trigger point: Crypto.com launches tokenized shares in the European Economic Area, covering 1500 underlying assets

Specific figures are listed in an announcement issued from Limassol, Cyprus on August 12, 2026. Tokens for 1500 underlying stocks and funds can be traded, including NVDA, TSLA and AAPL, as well as commodity funds such as GLD and SLV. According to the company, transactions are conducted around the clock and piecemeal shares can be bought and sold. Commissions are waived during an undate promotion period; in the same paragraph, the company notes that monetary fees or spreads may still apply.

The largest crypto asset in 90 days, based on CoinMarketCap data

This model is not new. Binance launched tokenized U.S. stocks under the name bStocks as early as June 2026, and Robinhood and Coinbase are also active in this field. So the release is not so much a novelty as an opportunity to dissect the structure. Details come from the company's press release.

No ownership, no voting rights: The decisive sentence in the product text

states that these tokens do not confer "legal or beneficial ownership" of the underlying asset. Both terms are important: legal ownership refers to formal ownership, and beneficial ownership refers to economic ownership. Therefore, both levels are excluded.

In practice, this means that you will not be entered on any register of shareholders, you will not be invited to the annual shareholders 'meeting, you will not have a vote on dividends or the supervisory board, and you will not have any subscription rights in capital increase. For those who view stocks as participation rather than pure price bets, these products lose exactly what constitutes participation.

Issuer risk rather than sequestering assets: Who is ahead of you in bankruptcy

The most important economic difference is bankruptcy. Investment funds established in Germany are segregated: the fund's assets are separated from the assets of the management company, and if the management company is unable to pay, the fund's assets will not enter the bankruptcy estate. Stocks in your own securities account are also protected because the bank holds them for you.

This is not the case for derivatives. Your position is a claim on the issuer, and if the issuer goes bankrupt, you queue up as a creditor. The company pointed out this risk in its announcement and clearly listed counterparty risk, as well as market risk and liquidity risk, while noting that investors could lose some or all of their invested capital.

Custody by a broker has no change

According to the announcement, the underlying assets are held by Alpaca, a broker regulated in the United States. This protects the issuer's position. It does not automatically create a direct delivery request for you; whether you have access to these assets depends on the terms of the issue.

Foris Capital CY Limited: Contents covered by CySEC licenses and EU passports

According to the announcement, the issuer of the European Economic Area is Foris Capital CY Limited, formerly A.N. Allnew Investments Limited。It is regulated by the securities regulator of Cyprus, CySEC; its authorization number as a Cyprus investment company is 344/17, under which Cyprus implements MiFID II in accordance with the Investment Services Act No. 87(I)/2017, and this authorization has been notified to other EEA countries under the Freedom of Service.

The EU passport is a real protection mechanism, but it transfers responsibility. The home country regulator remains Cyprus, not Germany's BaFin. Complaints and out-of-court dispute resolution are conducted through Cyprus institutions and are usually in English. If you care about where regulators are, you should verify this before opening an account.

Germany's Electronic Securities Law shows what true token ownership looks like

It is wrong to say that securities on the blockchain must be just replicas of price. Germany has its own legal framework since 2021. The Electronic Securities Law allows securities to be issued without certificates and are entered into the electronic securities register by the issuer. If the register is maintained on a decentralized recording system, the law calls it a crypto securities register and crypto securities.

The decisive factor is a brief provision in Article 2, paragraph 3: Electronic securities are considered as things within the meaning of Article 90 of the German Civil Code. It can be owned, possessed and acquired in good faith, just like paper certificates. Article 8 distinguishes between collective registration through trustees and individual registration. In individual registration, you appear in the register as the right holder.

What the law allows stocks to do

is narrower than many marketing texts imply. It covers bearer bonds, registered shares and bearer shares, of which bearer shares are limited to the Central Register. In any case, tokens on U.S. stocks are not within its scope. But the law can be used as a yardstick to what kind of documents you really hold rights.

MiCA does not apply: Financial instruments are excluded from crypto regulation

A common misconception is that since MiCA, every token in Europe has been regulated by the same rules. EU Regulation 2023/1114 is just the opposite. According to Article 2, paragraph 4 (a), it does not apply to crypto assets that are financial instruments. Equity derivatives are a financial instrument, so they do not fall within MiCA, but within the scope of MiFID II.

For you, this means two things. There are no MiCA white papers you can refer to. Instead, MiFID II's business conduct rules apply, namely, appropriateness assessment, cost disclosure and target market determination. This is not a worse framework, but a different framework, and the files are named accordingly.

Dividend equivalents rather than dividends: What happens when distribution

If the company behind the underlying asset distributes dividends, you get nothing because you don't hold shares. The announcement states that users may be eligible for a "dividend equivalent adjustment", which is an adjustment corresponding to dividends. The accompanying instructions are equally clear: such adjustments are subject to the respective product terms and conditions and are not guaranteed.

The Fear and Greed Index places market sentiment between extreme fear and extreme greed

The difference is not just a matter of wording. Dividends are claims to the joint-stock company derived from resolutions of the annual general meeting; adjustments are contractual payments made by the issuer in accordance with its own terms. The U.S. withholding tax that can be partially deducted when actual stocks are deposited in securities accounts is not necessarily treated in the same way here. If dividends are the reason for your purchase, you should check this out in advance.

All-weather trading: spreads and liquidity outside of trading hours

The most powerful selling point of these products is the ability to trade on weekends and overnight. The underlying asset is at a standstill during these times: the New York Stock Exchange is closed and there is no continuous reference price. Issuers still quote bid and ask prices and do so at their own risk.

This risk is passed on to you in the form of a spread, which is the difference between the bid price and the ask price. Spreads can widen when issuers 'hedging costs become higher, such as on Sunday night or before quarterly earnings reports. For products denominated in U.S. dollars, a currency surcharge will also be added. According to the company, commission-free transactions are only available during promotion periods without an end date.

For tax purposes, redemption claims distinguish between two different regimes

In Germany, the taxation of tokens depends on the way they are legally structured. If it securitizes money reimbursement claims against issuers, then monetary claims are the obvious classification: gains are investment income subject to a uniform withholding tax regardless of the duration of the holding period. If there is no such claim, it may be classified as other economic assets and a one-year holding period applies to private disposal transactions.

This fork is why the issue of ownership is not an academic issue. We elaborated on which party applies to tokenized shares on August 10, 2026, including the question of the path through the issuer's document and which tax annex applies: taxing tokenized shares in Germany. Importantly, losses in investment income cannot be offset by gains in crypto assets, as they fall into different categories.

List before first purchase: Five details in product documentation

Each supplier provides a product description document before trading. Here are five key points to look at:

Issuers and regulators. Which company is in the contract, where is it located, which agency is supervised, and what is the license plate number?

Legal nature of positions. Is it talking about derivatives, debt securities or securities? Only the last one gives you rights to the underlying asset.

Support and hosting. Are the underlying assets stored, where are they stored, did you have access to them at the time of bankruptcy, or did you only have one claim?

Allocation processing. Are there dividend adjustments, are they guaranteed, and how to handle foreign withholding taxes?

All cost components. Commissions, spreads, currency surcharges, custody fees, and issues of when the promotion period ends.

If you don't find a clear explanation for any of these points, it's information in itself. A product whose legal nature cannot be determined after 15 minutes of reading is not suitable for a long-term investment portfolio.

Buying tokenized stocks: Points to keep in mind

Determine whether you are receiving ownership or debt before buying. If the product document says derivatives, you hold claims on the issuer and bear the risk of default. If you are looking for a regulated trading venue with a clear allocation, you can find suppliers in a comparison of regulated crypto exchanges.

Compare total costs, not just commissions. Spread, currency surcharges, and end of the promotion period are more important than zero in the commission column. Which supplier runs which structure is displayed by the broker comparison.

Record each position from the beginning. Whether your income is subject to a flat withholding tax or a one-year holding period depends on the legal nature of the product. If in doubt, you must be able to prove it. Related tools can be found in Crypto Tax Tool Comparison.