Looking at Kraken crypto exchange and its operating history, you can’t help but notice a few of its unique features. It is, for instance, one of the oldest crypto exchanges around having been established in 2013. It also has never been hacked. More importantly, Kraken was also the first crypto exchange to feature on the Bloomberg Terminal. Not to mention that it was the first crypto exchange to publish cryptographic proof of reserve audits – a great show of transparency towards its clients that even some of the leading exchanges haven’t matched yet.
Kraken’s path hasn’t, however, been free of challenges. Its greatest test came about in the last quarter of 2017. At this time, it was considered a market leader and the most sought after crypto exchange for safety and low trading fees. This not only had everyone wanting to join the exchange but also made it a target for cybercriminals that rammed it with numerous cyberattacks.
Unable to process its membership requests, keep off cyberattacks, and carry out crypto exchange duties optimally, Kraken had to shut down for one week in January 2018 to review its buggy systems. It has since come back to life and is still on its path to recapturing its market leader position.
But how trustworthy, safe, and reliable is the Kraken crypto exchange? We answer this and tell you everything else you need to know about Kraken in this review. And we start with a little background check.
What is Kraken?
Kraken is crypto to crypto and fiat to crypto exchange founded by Jesse Powell in 2013. It has its headquarters in San Francisco, California, and was born of the idea of providing a safer crypto exchange after the fall of Mt. Gox. It started off as a Bitcoin exchange but has since expanded its reach and currently hosts all the leading and emerging cryptocurrencies in the market.
Kraken is also constantly leveraging its impressive security record to attract the attention of high volume and institutional crypto traders. It has, for instance, created a secure over the counter exchange service where these high volume traders like banks and major crypto investors get to trade with each other directly.
How does Kraken Work?
Kraken is a pure crypto exchange. This implies that you won’t find most of the features that have become synonymous with other crypto exchanges. For instance, Kraken doesn’t have a crypto wallet, and you will, therefore, need to invest in one before trading here. Additionally, Kraken limits itself to the amount of personal data collected about its clients.
This, according to Kraken CEO – Jesse Powell, makes Kraken less susceptible to hacking. He goes on to encourage his exchange clients to consider investing in standalone offline crypto wallets and only have what they can afford to lose in their Kraken trader accounts.
Who can trade Kraken?
Kraken is a U.S based crypto exchange with a global reach. Virtually anyone from any part of the world can, therefore, open a trader account safe for the residents of Japan, Iran, Iraq, Cuba, and a few other countries. New York and Washington state residents are also unable to access Kraken crypto exchange due to BitLicense regulations. Registration is nonetheless quite straightforward as the exchange will only require your email, preferred username, and password for account activation.
Currencies supported by Kraken
Kraken is both a fiat to crypto and crypto-to-crypto exchange and will, therefore, support both fiat and cryptocurrencies trading pairs. Fiat currencies supported here include:
- Canadian Dollar
Cryptocurrencies supported on the Kraken crypto exchange include:
- Bitcoin (BTC)
- Ethereum (ETH)
- Bitcoin Cash (BCH)
- Litecoin (LTC)
- Dogecoin (DOGE)
- Stellar Lumens (XLM)
- EOS (EOS)
- Cardano (ADA)
- Ethereum Classic (ETC)
- Gnosis (GNO)
- Iconomi (ICN)
- Augur (REP)
- Dash (DASH)
- Monero (XMR)
- Ripple (XRP)
- Zcash (ZEC)
- Cosmos (ATOM)
- Melon (MLN)
- Qtum (QTUM)
- Tezos (XTZ)
- Tether (USDT)
These are then paired into 70+ trade fiat to crypto and crypto to crypto trading pairs.
How to trade on Kraken?
We found trading on Kraken relatively straightforward. You start by creating a trader account. Proceed to fund your account via either a bank transfer or a bitcoin deposit. You can then proceed to initiate a trade using the three different order forms available. With the simple buy or sell order form, you will only find the market and limit price features.
The advanced buy/sell order form is, however, more and ideally meant for expert traders. In addition to the market and limit orders, you will also find such additional crypto trading features as the stop loss and trailing stop loss. Additionally, these advanced traders are exposed to margin trading.
Kraken trading fees and commissions
Kraken maintains two primary crypto trading charges – the maker and taker fees. These are charged on a sliding scale where makers fees range from 0.16% for amounts of $1 to $50,000 to 0.02% for trades between $5 million and $10 million while purchases above $10 million are free. Taker fees, on the other hand, start from 0.26% for sales of between $1 and $50,000 and gradually decrease to 0.10% for sales above $10 million
Deposit and withdrawal
There are two primary ways in which you can deposit or withdraw money from Kraken crypto exchange. For fiat deposits, you can use bank wire transfer, given that the company doesn’t process credit and debit cards or online wallet payments. These deposits attract a fixed fee of $5. Cryptocurrency deposits, on the other hand, are primarily free while both fiat and crypto withdrawal charges are volume-based.
Security and crypto asset protection features
☑️ 2FA and Master Key:
We notice that Security at Kraken starts on the account registration page whereby upon registration, you will be presented with the option to create a Master Key and a PGP public key. You will also have the option of embracing two-factor authentication. However, unlike most other crypto exchanges whose 2FA is mobile phone-based, Kraken makes it possible to use the authenticator app or YubiKey hardware tool.
☑️ Cold storage:
Like most other crypto exchanges, Kraken holds a significant portion of the funds in their client trading accounts in cold storage. And we believe that this goes along in discouraging cyberattacks and minimizing their impact if they ever succeed.
☑️ Proof of Reserves:
We started by mentioning that Kraken was the first big crypto exchange to share their proof of reserves with their clients. This refers to a cryptographic audit of the company’s finances in an attempt to show the exchange clients that their money is not misappropriated. We would, however, consider this more of transparency and less of security issues.
Regulation and reputation
Kraken is a highly deregulated exchange that has time and again dissociated itself from the traditional financial industry regulator. The exchange founder and CEO Jesse Powell have been particularly vocal in championing the deregulation of the blockchain and crypto industries and emphasizing the need for self-regulation. His company has shown open defiance to legislations and agencies perceived to be out to control the industry.
Kraken, for instance, has – at the time of writing this – ceased operation in New York and Washington because it failed to renew the required BitLicenses. Launching the proof of reserves, therefore, goes to prove that the crypto industry can still turn on its technologies to self regulate.
Kraken customer support
Kraken’s website features a comprehensive FAQ section that addresses some of the most common queries and challenges you will most likely face when interacting with the platform.
You are, however, free to raise any additional queries with the Kraken customer support team that is available 24/7 via live chat. Alternatively, you can raise a ticket, send them an email, or engage them on the different social media pages.
Kraken’s customer support team isn’t the fastest we have come across in the crypto exchange industry. We have noted that while the exchange holds on to the claim that live chats will be responded to in an hour, it sometimes takes longer with identification documents taking even longer (more than a week) to get verified and the trader account activated. We attribute this to growing Kraken support and condensed manpower.
Everything else you need to know about Kraken
☑️ No app or wallet:
Interestingly Kraken doesn’t maintain a Kraken exchange app or some other form of mobile trading. Just like they don’t provide their clients with free crypto wallets. This is unlike the rest of industry players that have gone out their ways to make crypto exchanges on their platforms as seamless as possible.
☑️ Supports margin trading:
Kraken exchange was one of the earliest adopters of leverage and margin trading for crypto transactions.
☑️ Facilitates the trade of crypto futures and indices:
Kraken is also one of the few crypto exchange industry players that process both crypto futures and indices trades.
Verdict: Is Kraken trustworthy?
Yes, we consider Kraken not just trustworthy but a reliable crypto exchange for the purchasing and sale of crypto assets. Our decision is informed by the fact that since its establishment in 2013, Kraken has not had any reported case of hacking or misuse of customer funds. Additionally, Kraken has voluntarily expressed transparency in its operations with the launch of the proof of reserves.
We also consider the fact that the company did cease operations for more than a week when they felt like they were putting client funds and data in danger – at the expense of the exchange’s reputation and possible loss of credibility in the face of the crypto community quite impressive. The only reservation we might harbor against Kraken would only result from their relatively sluggish customer support services.