Crypto ExchangesReview

Kraken Exchange Review 2020 – Details, Trading Fees & Features

Kraken is one of the largest and oldest Bitcoin exchanges in the industry. Founded in 2011, this San Francisco-based cryptocurrency exchange offers an advanced trading platform, complete with margin trading and over-the-counter (OTC) options.

With an easy-to-use platform, it aims to accelerate the adoption of cryptocurrency as well as allow users around the world to achieve financial freedom and inclusion. All American users can use this platform except New York and Washington residents, in addition to those people located in Afghanistan, Cuba, Iran, Iraq, Japan, North Korea, and Tajikistan.

Kraken is also known to offer one of the most sustainable trading fee schedules among all crypto exchanges in the industry. Catering to both new and professional traders, trading cryptocurrencies against other cryptos or fiat can be conducted on this platform. As a user’s monthly trading volume increases, their trading fees eventually decreases.

Despite struggling mostly during 2017, Kraken has emerged as one of the strongest crypto players in 2020. In light of this, some of its recent milestones include resuming its operations in Japan and establishing itself as the first crypto bank in the US.

Kraken Exchange Details

Websitehttps://www.kraken.com/
Available on mobileYes
Number of supported coins/tokens40
Number of supported trading pairs180+
Native tokenN/A
Supported fiat currenciesUSD, EUR, GBP, JPY, CAD, CHF, AUD
CEOJesse Powell
HQ LocationSan Francisco, US
Company OwnerPayward Inc.

History Overview

2011 to 2013

Kraken CEO Powell began working on Kraken in 2011 after he saw the possibility of Japan-based crypto exchange Mt. Gox shutting down. Powell visited the latter’s offices when security breaches were reported in the same year.

In preparation for Mt. Gox’s expected downfall, Powell started executing his plan of building a replacement to the said crypto exchange. For this reason, in September 2013, Kraken successfully launched after two years of testing and development.

By this time, they officially opened their order books to the public. Initially, the exchange offered Bitcoin and Litecoin as trading pairs and accepted Euro trades as well. Additional currencies and margin trading were added later on.

Since its launch, Kraken has received approximately $125 million in different rounds of seed funding.

2014 to 2016

Under those circumstances, in 2014, Kraken became the top crypto exchange in terms of Euro volume for Bitcoin trading. Because of the company’s ability to build trust in the digital asset industry, it has been selected by Bloomberg to provide complete bitcoin market data on its terminal. In detail, its price feeds and market data were pulled by Bloomberg Terminal, allowing over 320,000 clients to access it.

Also in 2014, Kraken has successfully passed the world’s first cryptographically-verifiable Proof of Reserves audit. According to the exchange, this method allows individual customers to cryptographically verify that their balance at the time of the audit was valid and part of the network.

Besides, it has been distinctly chosen by the Tokyo District Court to handle customer compensation claims related to the infamous collapse of Mt. Gox in 2014. Kraken was chosen over other companies due to its proven track record of stable exchange operation and reliable customer support.

In 2015, Kraken announced the beta launch of its margin trading option as well as the opening of its first bitcoin “dark pool”. Two years after, following its $5 million Series A investment in 2014 led by Hummingbird Ventures, Kraken completed its Series B round of investment led by SBI Investment.

Two major acquisitions have also been done during 2016. These include Dutch exchange CleverCoin and cryptocurrency wallet service Glidera.

2017 to Present

History shows that Kraken struggled during the most part of 2017, especially during the “crypto bull market” phenomenon. This is as a result of numerous performance issues and DDoS attacks. It has been alarming that CEO Powell himself had to apologize for the site issues in November 2017.

In March 2017, Kraken acquired the popular crypto tracking website Cryptowatch. Notably, by December of 2017, the crypto exchange was registering up to 50,000 new users a day. As of today, Kraken serves approximately 4 million customers in over 200 countries.

In 2018, Kraken suspended trading for over 48 hours, which was the longest interruption to its services ever since it launched. In line with this, in April of the same year, Kraken announced the closing of its services in Japan. Fortunately, its Japanese operations are back in 2020.

Platform Interface

Due to its regulatory compliance and American-based headquarters, Kraken is a good option for professional traders and institutional investors. Moreover, its advanced features like margin and futures appeal to more modern-day traders.

Kraken Official Website & Advanced Markets View
Kraken Official Website & Advanced Markets View

Key Features and Functions

24/7 Support. The platform provides round-the-clock global support with dedicated Client Engagement specialists who are knowledgeable of crypto and financial services.

Bug Bounty. For significant bug finders, Kraken offers bitcoin as rewards and recognition on their Wall of Fame.

Kraken Futures. Eligible users can leverage up to 50x with Ethereum, Litecoin, Bitcoin Cash, Ripple and Bitcoin futures available on Kraken.

Indices. Powered by CF Benchmarks, Kraken also provides access to aggregated trade data, ensuring settlement prices are real-time and reliable.

Margin Trading. The Kraken Trade Engine lets users leverage up to 5x, manage positions with advanced order options, and pay low rollover fees.

Proof of Reserves. Kraken has successfully developed and completed an industry-leading, independent, and cryptographically-verified audit within its platform.

World-Class Security. These include 2FA, withdrawal email confirmations, customizable and granular API key, global settings time lock, and configurable account timeout, among others.

Staking. Users can fund their Kraken account with supported staking assets such as Polkadot (DOT), Cosmos (ATOM), Tezos (XTZ), Bitcoin (XBT), Euro (EUR), and US Dollar (USD).

Kraken Pro. Available on both Android and iOS devices, Kraken Pro is a beautiful and mobile-first design for advanced crypto trading on the go.

Dark Pool. For explicitly large orders, Kraken allows anonymous and hidden order execution for institutional investors and crypto whales. This is available for Tier 2 accounts and above.

Supported Cryptocurrencies

Bitcoin (BTC)Monero (XMR)Waves (WAVES)Polkadot (DOT)
Ethereum (ETH)Tether (USDT)Augur (REP)Cosmos (ATOM)
Ripple (XRP)Ethereum Classic (ETC)Dogecoin (DOGE)Tezos (XTZ)
Bitcoin Cash (BCH)Icon (ICX)Basic Attention Token (BAT)USD Coin (USDC)
EOS (EOS)Qtum (QTUM)Kyber Network (KNC)Algorand (ALGO)
Litecoin (LTC)OmiseGo (OMG)Chainlink (LINK)PAX Gold (PAXG)
Cardano (ADA)Zcash (ZEC)Storj (STORJ)Compound (COMP)
Stella (XLM)Lisk (LSK)Gnosis (GNO)Orchid (OXT)
Tron (TRX)Nano (NANO)WaterMelon (MLN)Kava (KAVA)
Dash (DASH)Siacoin (SC)Multi Collateral DAI (DAI)Augur V2 (REPV2)

Note: Not all currencies can be directly traded with one another. Check out Kraken’s fiat-to-crypto, fiat-to-fiat, and crypto-to-crypto pairs here.

Deposit/Withdrawal/Trading Fees

The Kraken platform’s fee schedules are volume-based. This means that the higher the trade volume you have in your account, the lower the fees you will pay on your subsequent trades.

In this exchange, orders are matched between users who want to buy cryptocurrencies with the orders from users who want to sell cryptocurrencies (and vice versa). In line with this, they charge a fee once an order has been executed or matched with another user’s order. Cancelled orders before execution are not charged.

The fee ranges from 0% to 0.26% of the total cost of a user’s order and depends on the following:

  • The currency pair that is being traded
  • User’s 30-day trading volume (in USD)
  • Whether an order is considered a maker or taker

In view of this, get to know Kraken’s detailed fee schedules for trading, stablecoin, FX, Dark Pool, and margin trading here.

Accepted Payment Methods

To fund your Kraken account, users can deposit using both fiat currencies and/or cryptocurrencies. Be that as it may, the availability of fiat deposits and withdrawal options depend on a user’s residency and verification level. In contrast, there are no deposit limits when using cryptocurrencies.

Kraken Account Verification
Kraken Account Verification

For Traditional Currencies

Users can also use USD, EUR, CAD, JPY, GBP, and CHF to fund their Kraken accounts. Accordingly, fund deposits with CAD and Single Euro Payments Area (SEPA) are free.

CurrencyDomesticInternationalProcessing Time
USDFedwire

High-Limit

Etana Custody

Silvergate Exchange Network (SEN)

High-Limit

Etana Custody

Silvergate Exchange Network (SEN)

 

 

 

1-5 business days

 

EURSEPA bank transfer

Etana Custody

Wire transfer

Etana Custody

CADWire transfer

In-person

Etana Custody

Etana Custody
JPYEtana Custody
GBPEtana Custody

ClearJunction

> FPS

> CHAPS

> BACS

Etana Custody

ClearJunction

> FPS

> CHAPS

> BACS

CHFSIC – Bank FrickSWIFT – Bank Frick

For Cryptocurrencies

If you already own supported digital assets, you can certainly use those to fund your Kraken account. Thus, after account confirmation, all crypto deposits are instantly credited to your account.

For Third-Party Payments Processors (TPPPs)

Kraken does not accept deposits and withdrawals through third-party payments processors (TPPPs) due to compliance reasons. In this case, the crypto exchange stated that it is difficult for them to verify a transaction coming from these external parties.

Moreover, Kraken’s system will automatically return deposits and cancel withdrawals to/from TPPPs. Unsupported TPPPs include, but not limited to, the following:

  • The Currency Cloud
  • Earthport
  • Neteller
  • PayPal
  • Paysera
  • Western Union

Controversies & Issues

While individual users had their accounts compromised and experienced funding delays over the years, Kraken is never known to have been the victim of any major heist or hacking attacks. This makes it one of the safest crypto exchanges of all time.

With attention to past incidents, you can check here for the incident history.

On the other hand, a Bloomberg report published in 2018 suggested the possibility of wash trading of Tether (USDT) on Kraken. The study found frequent repetitions of oddly specific orders going into five decimal points, showing the possibility of bot trading.

Correspondingly, Bloomberg pulled the data of 56,000 USDT trades conducted from Kraken’s public order book between May 1 and June 22. Despite allegations, no evidence that Kraken itself is involved in any manipulation has been proven.

Previously, one former Kraken employee namely Jonathan Silverman has filed a lawsuit against its prior employer. He claimed that the crypto exchange failed to pay him for his work. As discussed verbally with CEO Powell, Silverman should have received a $150,000 salary, as well as 10% commission of the trading desk’s annual profit.

Achievements

On the positive side, with almost a decade on its exchange operations, Kraken has built a reputation as a secure destination and a popular choice among traders and institutional investors. To point out, it was the first crypto exchange to pass the Proof-of-Reserves cryptographic audit. In addition to that, it is the first one to provide crypto market price information to the Bloomberg Terminal.

Kraken is also a self-regulated exchange that complies with rules and regulations in all supported jurisdictions. It is particularly registered as a Money Services Business (MSB) with FinCEN in the United States and FINTRAC in Canada. Aside from this, Kraken Futures is also regulated in the United Kingdom by the Financial Conduct Authority.

Gaining massive support from various investors, Kraken has also completed a $13.5 million round of financing on Bnk To The Future (BF), an online investment platform. With over 2,000 participants, the campaign pushed Kraken’s value past the $4 billion mark while funding new acquisitions.

After seizing its operations in April 2018, Kraken has also completed its registration as a crypto asset exchange service provider under the Payment Services Act, allowing it to legally operate within the Japanese market in 2020.

Therefore, upon receiving its special purpose depository institution (SPDI) license for Kraken Financial, Kraken is established as the first cryptocurrency exchange to become a US-regulated bank.

Pros and Cons

Pros

  • Supports both fiat and cryptos for trading and deposits
  • Kraken holds all of the funds at hand (100% reserves)
  • No record of being hacked
  • Users can run their own audit
  • Still one of the largest exchanges by trade volume
  • Cheaper trading fees, based on volume
  • Fast and free SEPA deposits, specifically in Europe
  • Available worldwide
  • Advanced trading options

Cons

  • Poor customer support
  • UI/UX design may not be suitable for crypto beginners
  • Various cases of users getting their accounts (and funds) locked
  • On the negative side, it has slow KYC approval

Final Score

  • Services offered: 5/5
  • Cryptocurrency support: 5/5
  • Fees: 3/5
  • Security: 5/5

Review Score: 4.5/5

Summary

While some cryptocurrency exchanges have limited features, cryptocurrency support, and trading options, Kraken is a very extensive platform. It specifically allows users to do margin trading, dark pool, short selling, and OTC trading. With this in mind, more advanced users take advantage of these opportunities.

Overall, Kraken is one of the most trusted cryptocurrency exchanges in the crypto scene. Above all, it has not experienced any significant breaches and reported damages from end-users. It continues to expand its operations and proves to be one of the best choices when it comes to cryptocurrency trading and storage.

FAQs

> What is Kraken?

Founded in 2011, Kraken is one of the longest-operating crypto exchanges. It is an American-based digital asset trading platform that has proven to be one of the most secure places to buy, sell, and trade cryptocurrencies. It also offers extensive support to fiat and cryptos.

> Is Kraken safe for trading?

Yes, Kraken is certainly safe for trading. This crypto exchange has a long-term security track record up until the present. There have also been no reports of any hackings associated with this exchange and no major negative events have happened that gravely affected its operations.

> How do I open a Kraken account?

It is certainly easy to create a Kraken account. As a matter of fact, just simply visit the official website and click Create Account on the landing page or click here.

> What are the payment methods accepted in Kraken?

Kraken accepts crypto-to-crypto and fiat-to-crypto deposit options. Nevertheless, limits for fiat deposits and withdrawal options depend on the completed KYC verification of the user. USD, EUR, CAD, JPY, GBP, and CHF can be used to fund your Kraken accounts, alongside all supported cryptos.

> Is Kraken better than Coinbase?

Kraken and Coinbase are natural competitors as both are American-regulated exchanges with excellent crypto safety records. Both Kraken and Coinbase have been around for quite long and offer many trading pairs.

Yet, Coinbase has more trading volume than Kraken and it has a BitLicense allowing it to legally operate within the state of New York. Despite that, Kraken has a wider feature set on its platform and has a generally better reputation. In terms of privacy, Coinbase is a bit skeptical as it has been trying to sell data to the US government, particularly the IRS and the Drug Enforcement Administration.

> Is Kraken better than Binance?

In terms of trustworthiness, Kraken is better than Binance. The crypto exchange proves that it holds 100% of its reserves, whereas Binance has not declared if they actually have all the deposited amount of users at any given time.

Nevertheless, Binance is a much bigger exchange that offers higher liquidity and more cryptocurrencies to choose from. What is more, Binance has been actively expanding into the DeFi ecosystem, making it more progressive than Kraken.

> Is Kraken better than Gemini?

Considering that both Kraken and Gemini are US-based exchanges, they have strengths of their own. In light of this, both have the same target audience. Hence, both are known crypto rivals to each other. As one of its USP, Kraken has lower fees than Gemini and has proven its credibility and transparency through its audit system.

Even so, Gemini has better customer support, attracting a higher client-to-customer satisfaction rate than Kraken. Among other things, Gemini’s trading interface is much simpler to use but has fewer features for professional traders.


Casseia Perez

An aspiring journalist who spills her ideas in cryptocurrency and blockchain-related matters. With her background in Communication and Journalism, she is more inclined to write about reality than fiction.

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