Let's face it, the cryptocurrency exchange market is getting more crowded every day and it becomes difficult to determine which of the many exchanges is the most suitable for you. Whether you're a casual investor just looking to buy and hold cryptocurrencies, or a professional keen to get the most out of every trade, it's more important than ever to make sure you're trading the best market for you.
In this Kraken review, we take a look at the main pros and cons of trading on one of the most popular cryptocurrency exchanges on the market. We'll take a look at the platform in its entirety, looking at everything you need to know before giving it a try, including its reputation, digital asset selection, security options, reporting procedures, and more!
Let go of the Kraken!
Launched in 2011 by Jesse Powell, a pioneer in the cryptocurrency space, Kraken is a cryptocurrency exchange that was designed to serve as an alternative to the infamous Mt.Gox, which was by far the largest cryptocurrency exchange at the time.
Today, Kraken is one of the oldest and best-known names in the industry. Jesse has spent a decade building and perfecting his cryptocurrency trading platform. Today, Kraken is a safe destination where novices and professionals in the cryptocurrency industry can buy, trade, and sell their digital assets.
Kraken's head office is in San Francisco, but the company has operations in several other countries, including the United Kingdom and Canada. Since 2011, Kraken has gone through multiple funding rounds, raising $ 1.5 million in seed capital in 2011, and more recently $ 100 million in February 2019 from investors Digital Currency Group (DCG) and Hummingbird Ventures.
A pioneer in the world of crypto security, Kraken is one of the few major exchanges to have a flawless security record and was the first exchange to introduce a comprehensive auditing system to cryptographically prove that it holds the exact amount of user funds in an offline warehouse.
- Mobile options: No
- Type of exchange: Centralized
- Country: United States
- Launch of the exchange: 2011
- Deposit Methods: Cryptocurrency / FIAT
Withdrawal methods: Cryptocurrency / FIAT
- Withdrawal limits: $ 0 to no limits per month (depending on account level)
- KYC: Optional for cryptocurrency trading, mandatory for fiat trading.
- Number of assets: 200+
- Blocked countries: Afghanistan, Cuba, Iraq, Iran, Japan, North Korea, and Tajikistan
- Safety: High
- Reputation: Excellent
- Website: kraken.com
Kraken features
As one of the oldest cryptocurrency exchanges still in operation, Kraken has had a long time to understand what its users and the market, in general, expect from an exchange. With this rich experience, Kraken has developed the perfect solution for almost everyone.
Kraken's trading interface is divided into three distinct sections: Simple, Intermediate, and Advanced. These different sections provide access to an increasingly varied (and complex) set of trading parameters.
For beginners and those who aren't too concerned with the extra details, the simple option is probably the best, as it allows you to buy or sell digital assets with a market or limit order. Intermediate settings allow the stake to be stepped up by introducing leverage options, timed orders, and limit orders, making it suitable for more experienced users. Finally, the advanced trading option unlocks all functionality, adding limit order options, a variety of new order types, and a powerful conditional close setting.
Kraken is unusual in that the default trading view does not display charts or market metrics, but requires users to click the “Trading Tools and Charts” button to open Kraken Pro, which will open a trading interface very similar to that of TradingView.
Kraken's trading tools are surprisingly powerful, with enough technical indicators, chart options, and tools to satisfy even the most advanced traders.
Overall, Kraken has something for everyone, dividing its trading panel into sections for different levels of experience. For beginners, Kraken makes trading extremely simple, while intermediate and advanced users can access some of the best features on the market, providing powerful tools to fine-tune the trading process.
Kraken fees
Overall, Kraken is very competitive with its pricing and is relatively transparent. However, information about its fees is scattered around the website, making it a bit tedious to assess all charges. Overall, the trading fees are roughly in line with the most popular exchanges, but Kraken really sets itself apart from high volume traders, who enjoy some of the best prices in the industry.
Like many cryptocurrency exchanges, Kraken has a volume-based fee schedule for traders and is also one of the few exchanges that offer zero percent fees for high volume traders. For traders with a 30-day trade volume of less than $ 50,000, Kraken charges 0.16% for “doers” and 0.26% for “takers”, but these fees are reduced to 0% and 0, 10% respectively for high volume traders.
Transactions involving stablecoins are billed differently, from 0.20% for makers and takers, to free, assuming the monthly trading volume reaches $ 1 million or more. Margin fees are also different and range from 0.01 to 0.02% for opening a position, plus an additional 0.01 to 0.02% rolling charge charged every four hours.
Kraken applies the following fee schedule for its foreign currency deposits and withdrawals - please note that these fees are charged by Kraken's payment partners and are subject to change without notice:
- SEPA Bank Transfer (EUR) - deposits are free, withdrawals are charged at € 0.09.
US National Bank Transfer (USD) - flat fee of $ 5 for deposits and withdrawals
US Domestic Transfers and ACH Transfers (USD) - deposits are charged $ 5 each
Canadian Domestic Bank Transfer (CAD) - deposits are free on the Kraken side, but your bank may charge an additional fee, usually in the order of $ 10
Electronic Funds Transfer (CAD) - withdrawals are subject to a 0.25% fee, with no minimum or maximum amount
As of April 2018, Kraken no longer operates in Japan, as deposit and withdrawal methods involving the Japanese yen (JPY) have been discontinued.
For cryptocurrency deposits and withdrawals, Kraken has a fairly complicated fee schedule, with most cryptocurrencies subject to different fees for deposits and withdrawals, while some have a minimum deposit amount and or withdrawal.
Overall, the withdrawal fees for most cryptocurrencies are quite low, except for USDT which has a steep $ 5 fee.
The fee breakdown for some of the most important digital assets is shown below:
- Bitcoin (XBT) - Free deposits, 0.0005 XBT withdrawal fee. 0.0001 XBT minimum deposit, and 0.005 XBT minimum withdrawal.
Litecoin (LTC) - Free deposits, 0.001 LTC withdrawal fee. 0.0001 LTC minimum deposit, and 0.01 LTC minimum withdrawal amount.
Tether (USDT) - Free deposits, 5 USDT withdrawal fee. 1 USDT minimum deposit, 10 USDT minimum withdrawal.
Zcash (ZEC) - Free deposits, 0.0001 ZEC withdrawal fee. Minimum deposit of 0.0001 ZEC, and minimum withdrawal of 0.0005 ZEC.
Stellar Lumens (XLM) - Free deposits, 0.00002 XLM withdrawal fee. 0.00001 XLM minimum deposit, and 25 XLM minimum withdrawal amount.
Ethereum (ETH) - Small fee to transfer ETH to the Kraken wallet, 0.005 ZEC withdrawal fee. 0.05 ETH minimum deposit, and 0.01 ETH minimum withdrawal.
EOS (EOS) - Free deposits, 0.05 EOS withdrawal fee. 0.01 EOS minimum deposit, and 0.5 EOS minimum withdrawal.
Also, you may be charged a standard network fee for any deposit, depending on the cryptocurrency.
Kraken verification and transfer limits
Like many other cryptocurrency exchanges, Kraken complies with Know Your Customer (KYC) and anti-money laundering (AML) regulations. This basically means that you will need to provide your identity and address, as well as some additional information to get a fully verified status on the website.
Kraken separates its user accounts into 3 different levels, each of which offers additional features, better limits, and more deposit and withdrawal options than previous levels. The available current account levels are as follows:
Level "Starter" - For this starter level you will need to provide your full name, date of birth, country, and phone number. This will allow you to trade cryptocurrencies, but will not allow you to deposit, withdraw, or trade fiat currencies. You will not have a maximum deposit limit for cryptocurrencies but are limited to $ 5000 per day for withdrawals.
Level "Intermediate" - The second level of verification provides several other features for users but requires that you provide your full physical address (proof of residence), as well as identity documents. Then you can deposit and withdraw up to USD 100,000 per day. In addition, Level Intermediate accounts can also trade fiat and cryptocurrency pairs and have higher cryptocurrency withdrawal limits, namely $ 500,000 per month.
Level "Pro" - This is the highest level of verification available on the website, requiring the most extensive identity verification checks, but also offering the highest account limits and access to all features. To reach this level you will need to provide a signed application form and your KYC documents. Level Pro accounts have no limits and can deposit and withdraw as they wish.
Beyond levels "Starter" and "Intermediate", which are verified automatically, Kraken indicates that verification can take between 1 and 5 days. This time frame is roughly in line with the industry average, while the verification requirements are not too stringent, especially for lower-level accounts.
Assets available on Kraken
What are the available assets?
Kraken has an excellent variety of digital assets and currencies available for trading on the platform and is highly regarded in the cryptocurrency trading community as only high-quality assets are supported (no shitcoins!).
In total, Kraken has over 70 trade pairs, with almost all major crypto-assets on the platform tradable for at least two fiat currencies.
Some of the main digital assets available for trading on Kraken include Bitcoin (XBT), Dash (DASH), EOS (EOS), Ethereum (ETH), Litecoin (LTC), and Zcash (ZEC). In terms of stablecoins, you can use Tether (USDT), although Kraken compensates for this by offering five fixed currencies for the trade, namely US Dollar (USD), Euro (EUR), Canadian dollar (CAD), British pound (GBP) and Japanese yen (JPY).
Currently, Kraken allows trading of eight cryptocurrencies on margin, the main ones being Bitcoin (XBT), Ethereum (ETH), and Tether (USDT). The leverage available for these currencies is at least 2x but can reach 5x if trading Bitcoin, Ethereum.
Overall, with the backing of the seven largest cryptocurrencies by market cap, plus several other promising cryptocurrencies, it's clear that Kraken is only targeting the strongest digital asset traders. However, it might not be as suitable for those looking to trade digital assets from less established projects.
Kraken trading volume
Kraken trading volume and liquidity
When it comes to trade volume, Kraken is one of the largest in the world, often achieving between $ 1 billion and $ 2 billion in total trade volume per day, and currently sits comfortably in the top 5 exchanges by volume.
In almost 11 years in business, Kraken has managed to develop a strong name, with an impressive number of users, many of whom trade Bitcoin (BTC) or Ethereum (ETH) against the USD or Euro. As a result, the vast majority of its trading volume is made up of BTC / USD, BTC / EUR, ETH / USD, and ETH / EUR, all of which account for over 50% of Kraken's daily trading volume.
Overall, the vast majority of trading pairs on Kraken have excellent volume, with about 20 of all trading pairs having a daily trade volume of at least $ 10,000,000.
Because of this, Kraken is a great choice for those looking for excellent liquidity, as most of the major assets listed on the exchange have a large trading volume. However, for some less popular trade pairs, Kraken has liquidity issues, and therefore is not the best option for those who deal with small digital assets, but is perfect for those who mainly deal in BTC / USD, BTC/ETH, BTC / EUR, ETH/USDT and so on.
Is Kraken a reliable exchange?
How trustworthy is Kraken?
Since its launch in 2011, Kraken has managed to make a name for itself in the digital exchanges industry and is one of the few cryptocurrency exchanges to always watch and comply with the ever-changing regulatory landscape.
When it comes to exchanges, Kraken is relatively open about its operations, and even maintains a status page, which highlights any current issues with the website or any of its supported digital assets. This page also provides some statistics on website and API uptime, as well as a history of previous incidents. At the time of writing, Kraken has achieved an API and website uptime rate well over 99.9% over the past month.
Kraken also performs internal audits on a regular basis, demonstrating that they have properly accounted for all funds, and provides a comprehensive guide to the audit process used and how Kraken customers can verify that their balances are included in the audit.
In addition, Kraken has demonstrated transparent business ethics, even in the face of unfair competition. For example, many less established and less ethical exchanges practice "wash trading" to artificially increase their apparent trading volume, making them appear to be a very liquid exchange. However, in a transparency report from the Blockchain Institute for Transparency, no evidence of "wash trading" was found at Kraken, with reported and actual trade volumes lining up closely.
Among the years, Kraken has been the target of two lawsuits, the first being a class action lawsuit for allegedly mismanaging the exchange during a denial of service (DDOS) attack, while the second lawsuit was filed by UnitedCorp, which claims that Kraken, among others, manipulated the Bitcoin Cash (BCH) network for its own benefit, causing UnitedCorp to suffer massive losses.
Despite its excellent reputation as a business, Kraken still managed to form a relatively bad opinion on several customer review sites, including Trustpilot. Many Trustpilot reviews on Kraken are negative, with the vast majority of complaints mentioning either KYC verification issues, two-factor authentication reset issues, or long delays for support.
However, overall review websites often need to be taken with a grain of salt, as it is often much easier to get a negative review than a positive review as few people take the time to review a service unless they have a negative experience.
Based on my own experience, I have got no problem so far.
Kraken is a stable and secure exchange!
Is Kraken a safe cryptocurrency exchange?
When it comes to security, few can dispute Kraken's credentials. To date, Kraken is one of the few major cryptocurrency exchanges that has never been compromised. In an age when cryptocurrency exchanges seem to be hacked day in and day out, this is certainly a rare feat.
To achieve its flawless level of security, Kraken stores the majority of its users' funds in off-line warehouses, geographically spread across several countries. In addition, Kraken servers are monitored 24/7 and protected by armed guards, while a team of security experts regularly test for potential vulnerabilities.
For users, Kraken offers a variety of additional options for you to help better secure your account. These include optional two-factor authentication using Google Authenticator and Yubikey, coupled with no SMS or cellphone recovery, ensuring your funds are protected even if your phone is stolen. Additionally, you can set a master key, which requires any recovery attempt to be authenticated first.
Kraken even offers account lockout settings with its Global Settings Lock (GSL) feature, which allows you to lock your account, preventing hackers from trading or withdrawing funds even if they manage to gain access to your account.
Overall, Kraken is one of the best exchanges when it comes to security, giving you all the options you need to secure your account no matter what the scenario.
Withdrawal time on Kraken exchange
How long we need to wait for withdrawals?
Most cryptocurrency traders will, at one point or another, have to withdraw their funds from the exchange of their choice. However, since this can reduce the activities of a cryptocurrency exchange, many place restrictions on the amount and speed of withdrawals, often requiring several days to process the withdrawal.
On Kraken, withdrawals take approximately 1-5 business days for domestic EUR SEPA and USD US transfers, while domestic transfers in Canadian CAD take 2-5 business days. However, as with many other exchanges, users report that withdrawals often take much longer.
For cryptocurrencies, Kraken does not provide a specific breakdown for each digital asset but note that it takes 0-20 minutes for a cryptocurrency withdrawal to pass internal checks and be broadcast to the blockchain. Then, the time it takes to reach your account depends on network congestion.
Who does Kraken report to?
Kraken does not provide any information on how it reports financial accounts to the Internal Revenue Service (IRS) or any other tax authority. However, this is generally the case for any regulated exchange operating in the United States.
Recent reports indicate that Kraken has issued 1099-K crypto tax documents to select users, although it is not clear whether they automatically transmit personal data to the IRS. However, if we look at Kraken’s privacy policy, two key points from section 7.2. stand out:
“We are required to disclose or share your personal data in order to comply with any legal obligation […] This includes exchanging information with other companies and organizations for the purposes of fraud protection and mitigation. credit risks ”.
“We receive a subpoena, warrant, court order or any other legal requirement”
Arguably, Kraken is not technically considered a financial institution and therefore should not have to comply with the Foreign Account Tax Compliance Act (FATCA), although it may have to disclose financial details to the IRS or other tax authorities if specifically asked to do so.
Therefore, it is likely that this information will only be provided upon request, rather than being an automatic process performed for all users.
Education
Kraken has a very rich section to educate users about cryptocurrencies, blockchain technology, as well as security issues. This is done through articles, videos, webinars, and even podcasts. This is another great feature of this exchange!
What are the customer service options?
When it comes to customer service, Kraken has almost all the bases covered, offering round the clock support through a variety of channels, it's usually possible to get most issues resolved relatively quickly.
Like many modern websites, Kraken offers a comprehensive FAQ page, and, in my opinion, it is one of the most comprehensive FAQs I have ever seen. Kraken FAQs cover everything from the basics to guides on how to secure and use your account and even provides definitions of terms.
Beyond the FAQs, the next line of support is a live chatbox that can be found on many pages, allowing you to quickly speak with a Kraken representative about any issues you may have. Kraken is one of the few cryptocurrency exchanges to offer this method of support, but there may be a short wait for you to connect with a representative. Keep in mind that the first one to chat with you would be "Kai", a bot, but if you ask to chat to a live assistant they quickly access this option.
Kraken also maintains a support presence on a variety of other platforms, including Facebook, Twitter, and Reddit, where questions and issues are usually answered daily, although many of these complaints are referred to Kraken's internal ticketing system. The internal ticketing system is the way to deal with the majority of issues and requires that users be logged in to submit a support request, with the option to escalate a request if it needs to be dealt with urgently.
Typically, Kraken customer support responds within 24 hours, but during peak hours it can take considerably longer, as is the case with many cryptocurrency exchanges.
Kraken exchange conclusion
In conclusion
Benefits of the Kraken Exchange
? Has never been hacked
? Supports many deposit options
? High trading volumes
? 24/7/365 customer service
Disadvantages of the Kraken exchange
? Slow checking of accounts
? Not available for New York and Washington residents
? Variable costs
Overall, Kraken remains a strong candidate in an ever-changing trading landscape. Having stood the test of time and overcoming many of its own challenges, Kraken has continued to lead the market in terms of security and liquidity - strengths that have grown in importance in recent years.
Kraken is primarily aimed at European traders looking to trade high-quality digital assets with excellent liquidity while presenting itself as a promising platform for US and Canadian cryptocurrency traders. With an excellent user interface and a wide range of trading tools for traders of all levels of experience, Kraken is a great choice for everyone.
