Kraken General Overview
Kraken is a US-based cryptocurrency exchange that was founded in 2011 by Jesse Powell. This exchange advertises itself as the largest by volume in EUR transactions and is widely considered as one of the oldest and most reputable exchanges in the space.
During the course of evolution, Kraken has expanded its services and now offers cryptocurrency trading, OTC purchases, and much more. The platform was criticized in the past for instability issues so it was revamped into its current state. Competitive trading fees and reliable customer support make a clear distinction between Kraken and its competitors.
Speaking of uniqueness, Kraken was recently licensed to open and manage their own bank, meaning that they are the only cryptocurrency exchange that managed to secure such a license.
It is expected that many other exchanges will follow in the footsteps of Kraken but it seems that they are set to be the industry leaders based on their strategic investments and partnerships.
What is Kraken?
Kraken is a cryptocurrency exchange that is one of very few where users can make purchases in EUR. It is headquartered in San Francisco, California meaning that they fall under U.S. regulation. This exchange became known in the space after assisting with processing claims after the bankruptcy of Mt.Gox.
Even though it was founded in 2011, the exchange didn’t launch until 2013 and since then it has attracted a lot of volume and liquidity on the platform. Security and customer support are the main selling points for this exchange since it may well be the only brokerage service offering 24/7 live support and a few different levels of security.
Why Choose Kraken?
Kraken offers a variety of different services to its customers while also providing maximum security. Transactions that exceed $100k can be done through their OTC (over the counter) service which eliminates the need to deposit and withdraw funds. In such cases, the customer has a 1-on-1 interaction with a company representative making the service more personal.
Regulation is obviously a very important factor for financial service providers so users that worry about that should rest assured that Kraken complies with all regulatory requirements in the U.S. The fact that they were allowed to open a bank should be a statement for itself.
Competitive fees and ease of use should also be counted as advantages since Kraken does a fairly good job when it comes to user-experience and pricing models.
With all the upsides that come with Kraken, there are a few downsides as well. Those that want to diversify their portfolio can choose from 52 different coins and tokens but not beyond that. Kraken doesn’t offer many different options simply because they need to comply with regulatory requirements. Risky and new projects will find it hard to get listed on Kraken.
Revamping the exchange helped with some connectivity issues but bad response time is still one of the main complaints by their customers. Most of those complaints are related to the KYC process since it can be interrupted with slow response time and loading issues.
Pros and Cons
- Can be used to purchase and trade popular cryptocurrencies
- Fully regulated and US-based
- OTC trading
- 24/7 Live support
- Easy to use
- Supports fiat deposits
- Available in the United States
A variety of fiat currencies that can be deposited on the exchange sets Kraken apart from most of its competitors. Supported fiat currencies are:
- USD (US Dollar)
- EUR (Euro)
- CAD (Canadian Dollar)
- AUD (Australian Dollar)
- GBP (Pound Sterling)
- CHF (Swiss Franc)
- JPY (Japanese Yen)
Deposits and withdrawals are available via SEPA, SWIFT, wire and domestic transfers. The exchange states that most withdrawal and deposit requests may take anywhere from 1 to 5 business days. In reality, deposits shouldn’t take more than 24 hours while withdrawals may last a bit longer.
Since SEPA deposits are free of charge, Kraken may be a very interesting option for those residing in the European Union. Bank wire transfer fees shouldn’t exceed $10 for EU residents as well.
- Connectivity issues
- Not that many cryptocurrencies to choose from
- Not recommended for beginners
To be completely fair, there aren’t many cons that are worth mentioning. Connectivity issues are a recurring theme among the users complaining on forums and discussion boards, but the overall impression is that Kraken is a trustworthy and reliable exchange.
How Kraken Compares to Other Exchanges?
Kraken has a slightly different fee structure than its competitors. For example, instant purchases from account balance come with no fees. Payment card transaction fees come with an added 3.75% + €0.25.
Kraken Pro, which is designed for advanced trading comes with the following fees:
|30- Day Volume (USD)||Maker||Taker|
|$0 – $50,000||0.16%||0.26%|
|$50,001 – $100,000||0.14%||0.24%|
|$100,001 – $250,000||0.12%||0.22%|
|$250,001 – $500,000||0.10%||0.20%|
|$500,001 – $1,000,000||0.08%||0.18%|
|$1,000,001 – $2,500,000||0.06%||0.16%|
|$2,500,001 – $5,000,000||0.04%||0.14%|
|$5,000,001 – $10,000,000||0.02%||0.12%|
In terms of fees, security, and services that they provide, Kraken is very similar to Coinbase and Coinbase Pro.
The main website is very easy to navigate and there isn’t much to discuss it, really. Once users get past the registration process, they will find it easy to make purchases on the platform as the design is very straightforward.
Kraken Pro, on the other hand, does have some issues that should be considered.
The design itself is simple enough for advanced traders but beginners won’t appreciate it that much. Market depth is positioned sideways which implies that they wanted to fit everything into one page, rather than taking the simplistic route.
Kraken is widely known in the cryptocurrency space as one of the oldest exchanges out there. When it comes to security, they have had rigorous internal testing since Kraken launched. This is the main reason why this exchange was never hacked or compromised in any other way.
The security of user funds comes first on this platform. User funds are mostly kept offline with the exception of a few percentages that are used for liquidity. All users can benefit from two-factor authentication safety as well.
Regulation is also one of the reasons why users chose Kraken. Knowing that an exchange complies with regulatory requirements certainly gives potential users a confidence boost.
Important things to know about Kraken?
Kraken is a self-regulated exchange and complies with rules and regulations in all supported jurisdictions. It is registered as a Money Services Business (MSB) with FinCEN in the United States (reg. no. 31000136371793) and FINTRAC in Canada (reg. no. M19343731).
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Apart from cryptocurrency custody, Kraken offers fiat custody to their users as well. The following currencies can be deposited into Kraken’s Etana Custody:
Kraken can easily be one of the most competitive exchanges when it comes to fees. Depending on your monthly trading volume they can be as high as 0.36% or as low as 0%.
More information about the fee schedule can be found here.
Almost all countries around the globe can register and use Kraken for cryptocurrency purchases and trading but there are some that have restricted or no access at all.
At this time, Kraken does not offer service to residents of:
- North Korea
Clients in these countries can create an account but may be restricted from funding:
- Central African Republic
- South Sudan
The only two U.S. states that can’t use Kraken’s services are Washington State (WS) and New York (NY).
How to create an account on Kraken?
Registration is kept simple and it can be done by visiting the homepage and clicking on “create account” in the top right corner. After entering some basic information like your email and country of origin, an email verification will be required.
How does OTC trading work?
Kraken offers OTC trading services for purchases greater than $100k. Users that try this service will find it very convenient as it is completed with 1-on-1 interactions. It is worth mentioning that traders that consistently trade high volumes can even get a dedicated account manager. This also comes with a few added benefits in terms of communication and priority. Support tickets are priorities, email and phone communication are an option along with chat apps of your choice.
Is Kraken good for beginners?
Purchasing crypto via the main website will be as simple as possible, even for complete beginners. Credit card purchases and deposits are very clear and come with a set of instructions to make sure no mistake is made during the process. Using Kraken Pro on the other hand could be a problem.
Those that are a bit familiar with exchanges should find their way around the exchange fairly easily. For complete beginners, it may be a little bit confusing and complicated. The layout is designed to fit a specific size so it will probably cause some confusion among beginners. For those that are looking to get introduced to trading, Kraken may not be a very suitable starting point.
Does Kraken require KYC?
Verifying your identity is a requirement on this platform due to the regulatory oversight they fall under. All users must confirm their identity before being able to purchase and trade digital assets on Kraken.
Kraken looks and feels like a very safe and friendly place for all sorts of cryptocurrency transactions and it has the reputation and history to back that up. Since it is one of the oldest exchanges in the space it had a lot of time to be tested on many different fronts. Liquidity is always on a high level and security seems to never have been an issue for this exchange.
Brokerage services are very easy to access and use so the level of knowledge plays no role. Over the past few years, Kraken has expanded and improved greatly but there is still room for more. Their users are privileged in a sense because Kraken is one of few exchanges that offers 24/7 live support. Most of their competitors handle tickets with email requests that may take days or even weeks to resolve.
Even though beginners may find it hard to navigate the Kraken Pro platform it is not that different from other advanced trading options. Once users get comfortable with using it, it will prove to be a very easy and secure way to have complete control over your funds. Experienced traders may not find all the tools they need but all of the essentials are there.
And lastly, the simple fact that Kraken is the only cryptocurrency exchange licensed to operate as a bank should vouch for the legitimacy of this platform. This business move may also set a precedent for other exchanges that will follow in the future. Whatever the case, Kraken has been and still is, one of the oldest cryptocurrency exchanges and it seems that it is here to stay.