Kraken is one of the oldest exchanges, and is considered the most secure in the market today. Founded in 2011 by crypto enthusiast Jesse Powell, Kraken offers spot trading, futures and margin trading. The story of Kraken can be traced back to the failures of Mt. Gox, when Jesse Powel visited the latter and found it highly vulnerable to hackers. The revelation inspired him to start Kraken, basing its foundation on better security and organization of the system to ensure safety of users’ money. In just three years (2014), Kraken had become one of the most respected crypto exchanges in the market, which coincidentally was the same year Mt. Gox got hacked, losing $460 million of its customers’ money.
Kraken is based in San Francisco, California, and requires that all their users comply with American regulations, hence customers must verify their ID and undergo KYC and AML, in order to start trading.
Unlike other exchanges like Binance that offer more than a hundred coins for trade, Kraken only offers about +40 coins for trade. But more importantly, Kraken has turned out to be the most trusted crypto exchange, and supports many countries.
As earlier stated, Kraken is a regulated exchange thus users must pass the know-your-customer (KYC)/(anti-money-laundry) AML checks to be able to trade on the platform. You will be required to submit basic identification documents, which will be used in the approval of your new account.
The exchange has set three different account levels for users: Starter, Intermediate, and Pro, which are all having different requirements from users.
|Verification time||Up to 1 hour||Up to 5 days||Up to 5 days|
|Crypto withdrawals||Low limits||High limits||Highest limits|
|Fiat deposits||-||High limits||Highest limits|
The standard requirement when opening and verifying your account at Kraken is to ask you to provide full name, date of birth, and phone number. Additionally, you must be an adult of at least 18 years old and reside in an area supported by Kraken.
As you can see on the above table, attaining a pro verification level has lots of advantages, hence it’s highly recommended that you obtain the Pro verification level to enjoy using Kraken. This will allow you to trade on the dark pool and use the OTC desk, as well as higher fiat and crypto deposit and withdrawal limits. However all of this makes the most sense for high volume traders.
Kraken supports many countries, except a few that are listed in their website. Internationally, you cannot use Kraken if you reside in the following countries: Afghanistan, Iraq, Iran, Japan, North Korea and Tajikistan. Japan may be one of the countries with the most vibrant crypto sector based on the favorable regulations.
All residents of the United States can use Kraken, except those who reside in New York and Washington State. Kraken does not possess the infamous Bitlicense, hence are unable to serve New Yorkers.
Kraken is known for its liberal policies for international users, and most of the international crypto enthusiasts can use it.
Kraken supports major currencies of US dollars (USD), Euros (EUR), Canadian dollars (CAD), British Pound (GBP), Australian Dollars (AUD), and Swiss Franc (CHF). The exchange is considered one of the best in Euro deposits, for those living in the European Union countries. It has the largest Euro trading volume of any other exchange.
The amount spent in each of these currencies is known as trading volume. Currently, Kraken has over 40 different cryptocurrencies, paired together. Bitcoin (BTC), Bitcoin Cash (BCH), Dash (DASH), Dogecoin (DOGE), Litecoin (LTC), Ethereum (ETH), Ripple (XRP), Stellar Lumens (XLM), etc.
SEPA, SWIFT, Wire and domestic transfers are the methods through which you can do deposits and withdrawals. Depositing via SEPA is free, hence the reason people living in the EU region find it highly convenient.
A bank wire transfer from within the United States costs $5 and $10, while those living outside the United States pay €10.
Kraken does not support credit card deposits although in Canada they support debit card and cash deposits. The exchange charges a $5 fee for withdrawal.
Processing times range between one and two days for SEPA transfers.
Kraken has very high security standards and are amount the best in the industry. They have never been hacked and they itself is an achievement in the crypto industry which sees hacks on a monthly basis. With a dedicated security team with industry leading experts, they make sure that their clients funds are safe. They have bug bounty programs and are constantly improving as the security landscape changes on a daily basis so it is important to stay up to date.
When you open an account with Kraken they push you to set up a two factor authentication app or use a YubiKey.
Kraken trading fees are quite reasonable, as compared to its peers such as Coinbase. Those who trade a monthly volume of $50,000 or less pay a 0.16% maker fee and a 0.26% taker fee. As your trade volume increases, you’ll benefit from the exchange’s progressive discounts. When a trader hits $10,000,000 monthly trade volume, they are exempted from paying maker fee and just a low of 0.10 taker fee.
In comparison with other exchanges, Kraken charges the lowest fees. For example, its fee is lower by 0.5% than that of Bitstamp.
The availability of fiat deposit and withdrawal methods will depend on your residency and verification level.
Apart from the fees mentioned above, your bank may charge you fees for sending the deposit to Kraken’s payments partners.
Intermediary or correspondent banks (banks between your bank and our bank that processes the transaction in transit) may also charge fees or convert the transaction to a different currency en route (if sending Euros from outside of Europe, for example). These fees are on the account of the sender and the responsibility of the sending bank.
When sending money to Kraken, make sure you insert the details that Kraken provides for your transfer, as this will enable Kraken to properly identify your transfer and credit the funds to your account.
Kraken has also added InCore in addition to Bank Frick, Fidor and Etana as an additional fiat onramp option. Some European banks can block certain other crypto-associated banks, so having various options for fiat onramps make it less likely that your bank would have blocked them all.
Kraken allows investors to engage in margin trading. You will find all the currency pairs that can be traded on margin and their maximum possible leverage listed on the Kraken knowledge base.
Just to take a few examples showing the currency pairs (Base/Quote) and the available leverage.
What 5x leverage means is that you can open, say, an XBT/EUR €1000 trade with only €200.
- XBT/EUR – 2, 3, 4, 5
- XBT/USD – 2, 3, 4, 5
- XBT/GBP – 2, 3
- XBT/CAD – 2, 3
- XBT/USDT – 2,3
You can easily deduce that EUR and USD are the best base currencies to hold if you want to use leverage on Kraken, since other currencies are more limited in the amount of leverage you can use.
Now, if you want to trade on margin, you will have to pay the standard trading fees discussed in the previous section plus some extra fees for the privilege. However, there is no fee for settling a margin position.
Margin trading exposes Kraken’s funds instead of your own, and thus to wind down a margin position you either need to settle it or close it to restore Kraken’s margin pools.
Settling a position repays Kraken’s funds directly from your account balance without having to place a closing trade in the market. Upon settling, you acquire the asset that was originally received from the market at the time of the position’s opening.
Settling allows you to exit your margin position at the original opening price and with no trading fee.
Margin fees are charged based on the total value of the order. Collateral held is not deducted from that amount.
For long positions, margin fees are charged with a preference to the quote currency of the position’s currency pair. For short positions, margin fees are charged with a preference to the base currency.
Kraken offers 24/7 support, and the best way to get in touch is through chat. I’ve found the people manning the chat to be knowledgeable and able to answer any queries within a few minutes.
For those Kraken clients who actively use the platform for trading significant sums, they can avail themselves of an account manager who is available to help them out and provide a bouncing board for ideas.
My account manager has been absolutely wonderful. For example, he took a few hours to walk me through how margin trading works on Kraken via Zoom screen sharing, and he is also available to me for quick questions over Whatsapp and email.
Crypto trading and buying can be daunting at times due to the technical nature of it, so having an account manager to back you up and ensure you’re doing things the right way is invaluable.
The best part about our Kraken Account Management is that it’s free! You get access to an industry expert that will work to understand your individual needs and be there to provide you with the right solutions. As part of the program, you can make use of your personal account manager as often as you’d like to get help with things like trading and funding issues, platform snags or the OTC desk.
For those traders who want to maintain privacy or don’t want their orders to show up on the platform’s order book, they can use Kraken’s OTC desk. Once you have access to the desk you can get in touch with Kraken’s traders via a chat application like Signal, Telegram or Whatsapp. Once you’re in the chatroom, you can ask for a particular trading pair, such as XBT/EUR, and one of the traders will give you a quotation. Once you confirm the trade the transaction is executed.
OTC desk trades won’t show in your regular Kraken account, but you can request the OTC desk to produce a report of all your trades for you. This is useful for dealing with banks and audit firms who need documentation of the various transactions that have taken place.
Kraken is one of the top 5 exchanges in the world, and together with Coinbase, the most well-known. While Coinbase is super popular in the United States, Kraken is popular worldwide and is known to be a safe platform that has never been hacked.
Having said that, I would still recommend keeping your crypto in cold storage using devices such as the Ledger Nano X or Trezor, together with keeping the seed words using the Billfodl or similar devices.
Bitpanda is the leading crypto exchange in Europe with more than 1 million users. You can trade more than +30 cryptocurrencies, tokenized stocks, gold, silver and other metals.