Kraken Review 2023

Kraken is a cryptocurrency trading exchange based in the US. It was founded in 2011, making it one of the oldest ones around. Although US-based, Kraken is said to be the largest crypto exchange in euro-denominated trading. It offers trading in around 210 cryptos and stablecoins. It offers a variety of services: You can trade spot and futures, trade on margin, as well as trading NFTs. Staking is only available outside the US. 

The company offers two trading platforms, Kraken for beginners – a relatively simple platform that’s designed for doing spot trades – and Kraken Pro, a more advanced platform that offers futures and margin trading on 5x leverage (no options). The company thereby caters to both new traders, who want a simple way to buy and sell cryptos, and more advanced traders, who want more analytical tools, more advanced order options, and futures. The platforms are available both for desktops and mobile. 

Kraken has two major selling points. First is its safety. The site has never been hacked thanks to its strong emphasis on this point (the founder and now Chairman was originally in the internet security business). Secondly, its fees are some of the lowest in the industry, both trading fees and deposit (free) and withdrawal fees. The company is therefore a good choice for both beginning and experienced traders looking for a secure and inexpensive platform who don’t require access to the most obscure and esoteric coins. 

Customer service is available 24/7 through chatbot, live chat, phone, and email. 

Is Kraken a good broker?

Yes, it is. 

It’s one of the oldest in the business, having launched in 2013. Its security is top-notch: the exchange has never been hacked and it’s only gone down once, and that was for routine maintenance. It’s rated among the safest exchanges out there. 

Kraken lists over 200 cryptocurrencies and stablecoins, which is fewer than its bigger competitors but still should be enough for most people. Plus futures and NFTs (no options). Fees are among the lowest in the industry.

The company has two platforms for trading: Kraken, which is a basic platform for people who just want to buy and sell cryptos, and Kraken Pro, a more sophisticated platform that allows you to trade futures and margin with 5x leverage. Staking is available to clients outside the US.

The company is smaller than some of its competitors, such as Binance and Coinbase, however it claims to be the leading firm for EUR-based trading. Moreover its customers seem to be more satisfied, as indicated by the number of complaints it gets. 

The company’s educational offering is adequate but not outstanding. 

What is Kraken?

Kraken is a cryptocurrency trading exchange based in the US. It was founded in 2011, making it one of the oldest ones around. According to the company, it has had over 9mn verified clients (total, throughout its existence – not necessarily right now) in some 190 countries and traded over $207bn in 2022. It’s said to be valued at around $10.8bn. 

Although US-based, Kraken is said to be the largest crypto exchange in euro-denominated trading. It offers trading in over 200 cryptos and stablecoins. You can trade spot and futures, trade on 5x margin, as well as trading NFTs. You can even trade FX among the six currencies that it offers. Staking is only available outside the US.

Kraken was co-founded by Jesse Powell, Thanh Luu and Michael Gronager. Powell was consulting on security issues for the doomed Japanese bitcoin exchange Mt. Gox. He anticipated (correctly) that Mt. Gox would eventually collapse and began working on Kraken as a replacement. Kraken was launched in Sep. 2013. 

The company offers two trading platforms, Kraken for beginners – a relatively simple platform that’s designed for doing spot trades – and Kraken Pro, a more advanced platform with futures, 

Kraken’s claim to fame is its safety. Although some clients may have been hit by phishing attacks, the site itself has never been hacked. They go so far as to arm the people guarding the servers. 

The platform is also distinguished by its relatively low prices. 

Broker pros and cons

Is Kraken safe?

Safety is Kraken’s #1 claim to fame. Not only is it the longest- running platform, but also in an industry plagued with security concerns, its wallets have never been hacked and its platform has only gone down once, and that was for system upgrades. Kraken was rated the most secure crypto exchange in the industry in ICORatings’ 2021 Exchange Security Report 2.0 (not available on the web). CCData’s Exchange Benchmark Report however rates it #7 with an “A” rating, the second highest (only one exchange, Bitstamp, got an “AA” rating from them). 

Security is in the company’s DNA, as its founder, Jesse Powell, was originally a consultant on website security. 

The firm takes a large number of steps to make sure that your crypto assets are held securely. 

• New deposits are transferred directly to “cold” (i.e. offline) wallets, which are kept in a separate location from any online system. 
• Only the coins necessary for Kraken’s trading liquidity are kept in “hot” (i.e. online) wallets;
• A small number are in “semi-cold” wallets, which are on special machines that have locked hard drives;
• All wallets and all data are encrypted and can be decrypted only by accessing multiple security systems at once; 
• User verification documents are also stored in an isolated system;

As if that isn’t enough, the company’s servers are kept in secure cages and monitored around the clock by security guards with guns! 

Furthermore, the site employs a number of measures to insure that individual accounts are protected as well. The site has a unique Security Shield: an icon that sits at the top of the page next to your name that changes color as you enable more security features and also alerts you to new security features. It has five different levels of security for your account:

• Only your password is required to gain access to your account. This is the basic level and is not really adequate, because your account could be hacked if someone hacks your email. 
• Sign-in two factor authentication (2FA) is required. 
• Funding 2FA is required
• Master Key: This is an additional password that allows you to prevent an unwanted password reset, bypass sign-in 2FA, and turn off the Global Settings Lock. 
• Global settings Lock: this prevents changes being made to the account and hides sensitive account information.

Although the company does everything it can to ensure its own security, mistakes do happen. That’s why Kraken runs a bug bounty program, which pays a finders’ fee to anyone who can identify a weakness in the platform. 

Furthermore, the company takes a variety of measures to guarantee its financial security, such as maintaining full currency reserves. 

Of course, the exchange’s security is no better than your own. Make sure you don’t fall victim to any phishing scams! Cryptocurrency transactions can’t be reversed and so are a frequent target for fraud. When someone sends you a message on Facebook saying “Hey, check this out!” without using your name, don’t click! When you get an email invitation to a wedding from a friend you rarely hear from, ask that friend a question that only he or she would know the answer to before you click on the invitation (I fell for that one once and had my email hacked as a result). 

Is Kraken regulated?

No, no crypto exchanges are regulated. However, Kraken does confirm to all the regulations and legal requirements where it operates.

The company did form Kraken Bank, a special purpose depositoryinstitution licensed by the State of Wyoming, in 2020. This doesn’t seem to have resulted in the many new products that had been hoped. For example, there’s still no Kraken debit card. The website says in tiny print that Kraken Bank will be an independent affiliate of the Kraken family of companies. It is not currently operational.

Kraken is registered as a Money Services Business with FinCEN in the US and FINTRAC in Canada. In the UK it’s registered with the FCA as a Registered Cryptoasset Firm and an FCA Authorised Investment Firm. 

It’s also registered in Italy, Australia, and Abu Dhabi Global Markets. It used to be registered in Japan but was deregistered at the beginning of 2023. 

Kraken hasn’t been immune to the many controversies around the crypto industry. In early 2023 the US Securities and Exchange Commission (SEC) made Kraken shut down its staking business in the US. The SEC argued the business needed to be registered, which it wasn’t, and said “Kraken not only offered investors outsized returns untethered to any economic realities, but also retained the right to pay them no returns at all.” Kraken paid a $30mn fine without admitting or denying the allegations. 

Is Kraken legal in USA?

Kraken is a registered Money Services Business in the US and can be used by US residents except in the states of New York and Washington. 

It’s available in most other countries except for the usual international pariahs such as North Korea and Iran, plus its services are restricted in a number of African countries. The company pulled out of Japan at the beginning of 2023 due to the downturn in the crypto business there and no longer operates there.

Where is Kraken based

Kraken is based in San Francisco, although like many other tech companies nowadays it largely operates on a work-from-home basis. It also has offices in London and Singapore. 

According to Craft.co, Kraken exchange has received more than USD 126 million in venture capital. As such, it has acquired a number of crypto-oriented startups like 

Who owns Kraken

Kraken is a subsidiary of Payward Inc. Payward however is a private company and no information is available about its ownership, except that Companies House in the UK lists founder Jesse Powell as a person with “significant influence or control.” Some of the major venture capital funds that invested in it are Hummingbird Ventures, Blockchain Capital, and Digital Currency Group. 

Kraken’s CEO is David Ripley, who moved from COO to CEO in September 2022. 

The Chairman is Jesse Powell, one of the co-founders of the firm (along with former Chief Technology Officer Thanh Luu and Michael Gronager. Gronager is no longer with Kraken; it’s unclear whether Luu is still on the board.) 

Powell was CEO before Ripley. There’s quite a story behind the move. In June 2022, Powell unveiled a31-page culture document outlining Kraken’s “libertarian philosophical values,” which included some bizarre rules that caused a number of people to leave the company. He stepped aside in favor of Ripley a few months later. You can read about the kerfuffle on Wikipedia and The New York Times if you’re interested.)

Other subsidiaries of Payward include:

Staked, LLC: which bills itself as “the staking partner of choice for institutional crypto” 

Cryptowatch:  a website that allows one to track your crypto holdings over time with customizable charts and watchlists, instant price alerts, and multi-exchange trading

Crypto Facilities: another crypto trading platform

Can Kraken be trusted?

The company does better than several of its competitors. It has only 155 complaints with the US Consumer Financial Protection Bureau, which isn’t that many at all and is much, much better than its competitors. It has a 3.0 average on Trustpilot from 1,954 reviews, of which 26% were 5-star (the best) and 63% were 1-start (the worst). That’s pretty bad for a broker in general but pretty good for a crypto broker. 

Kraken’s security measures are top-notch. The exchange has never been hacked and has only gone down once, and that was for routine maintenance. 

Still, the company hasn’t avoided trouble entirely. In early 2023 the US Securities and Exchange Commission (SEC) made Kraken shut down its staking business in the US, which it said was unregistered and opaque, and fined Kraken $30mn. Note that there were no allegations that clients were in any way damaged by this operation. Staking is still available outside the US. 

Leverage

Margin trading is available on Kraken Pro. You can get leverage of up to 5x with a maximum of $500,000. It’s only available for a limited number of cryptos however. 

Margin trading is available to most Intermediate and Pro clients outside the US. Within the US and Canada, they need to meet certain eligibility requirements. 

Accounts

What is an “account,” exactly? It’s hard to tell.

There’s only one type of account for retail investors at Kraken. This is the usual practice with crypto exchanges: one account but several different trading platforms.

However, at Kraken there are three different levels to that one account: Starter (or Express in the US), Intermediate, and Pro. The difference depends on how much information you provide them (see “Account Opening and Deposit” for details). 

Here’s what you get with each different level of disclosure. As you might expect, the more information you provide them, the more you can do. 

You’ll need at least an Intermediate if you want to get involved in NFTs.

The firm does have two different trading platforms, but those aren’t “accounts” as such. Plus the fee structure remains the same on all the platforms.

There is a demo account for futures trading, which several competitors don’t have.

Fees

One of the big pluses for Kraken is its relatively low fees.

The company uses the typical maker-taker fee system. That is, orders that make liquidity (maker orders), which are orders not at the market price, pay the maker fee if the trade order is not matched immediately against an order already on the order book. On the other hand, orders that are filled immediately and thereby take away liquidity pay the taker fee (which is always bigger than the maker fee, naturally). The fee schedule is based on the cryptos involved plus the volume that the trader has traded in the last 30 days. 

Fees range from 0.16% for makers to 0.26% for takers for those trading under $60k a month to as low as 0.00%-0.10% for BSDs doing over $10mn a month. Please let me know if you fall into that range. 

The fees for instant Buy vary by country. You can see a list here. There’s also likely to be a spread as well, plus maybe an additional fee based on your funding method. The final price will be displayed before you pull the trigger so there won’t be any surprise. 

I noticed that Japan is not on the list, so presumably you can’t do an instant buy in Japan. 

Fees for stablecoins,FX pairs, and pegged tokens are different. For those, traders doing $50k or less per month are charged 0.20% or less regardless of which side of the trade they’re on. This falls to 0.02% for people doing $1mn-$10mn a month. The top of the line, people who trade more than $100mn a month, pay zero on the maker side and pay only 0.001% on the taker side. 

 Except if you do more than $1mn of business a month, in which case it’s free. Again, please let me know. 

Margin trading costs are different depending on which coin you’re dealing with. Bitcoin (BTC) and Tether (USDT) pairs have a 0.01% opening fee and a 0.01% rollover fee that’s charged every four hours. Other cryptos cost double that. 

Futures charges are based on volume, starting with 0.02%-0.05% for those trading under $100k a month, half of that for those doing $5mn-$10mn a month, down to 0.00%-0.01% for those doing over $100mn a month. 

Dark pool costs were the highest, but since the Kraken Dark Pool is currently in abeyance, we won’t discuss that. 

Trading Instruments

Kraken offers approximately 210 cryptocurrencies and stablecoins at last count, with ones being added and deleted all the time. You can see the whole list here if you’re interested. It runs from Aave to Zcash. This is a lot of coins but fewer than what the market leaders are offering. You can buy them vs currencies or trade one coin against another. 

You can also dabble in forex trading in that you can trade exchange your currency holdings for any of the other six supported currencies (USD, EUR, GBP, CHF, AUD and CAD).

It also offers margin trading (see the Leverage section) and non-fungible tokens (NFTs).

You can trade futures on cryptos BTC, ETH, XRP, SOL, MATIC, CRV, and LINK, as well as stablecoins USDC and USDT, although what the point of trading futures on a stablecoin is I have no idea. It looks like you can also trade futures on the stocks of various gaming companies and some other assets that I have no idea about. 

Staking used to be big on Kraken. However, on 9 Feb. 2023 the Kraken agreed with the US SEC to discontinue its staking business in the US and pay a $30mn fine for failing to register the offer and sale of their crypto asset staking-as-a-service program. The program still runs outside the US however, where you can stake around 14 or so coins and apparently some fiat currencies too! 

OTC services: High-volume clients (people or institutions who trade more than $100k a month) can access the Kraken over-the-counter (OTC) desk. This offers deeper liquidity, tighter spreads, and more discretion than the general trading environment, plus more personalized service, such as a dedicated account manager. 

Dark pool: A dark pool is a privately organized exchange designed to allow institutional investors to trade large blocks of securities without tipping their hand to the rest of the market. There used to be the Kraken Dark Pool for Bitcoin and Ethereum vs various currencies, but at the time of writing (June 2023) it’s not available. 

There’s no options trading and no debit card that you can link to your Kraken account so that you can go into the Lambo dealer and buy your new ride with your crypto winnings.

Account Opening and Minimum Deposits

You have to go through the normal “Know Your Client” (KYC) formalities of identifying yourself before you can trade on Kraken. 

Unusually though there are three levels of account verification: Starter (or Express in the US), Intermediate, and Pro.

Starter verification is just the basics: name, data of birth, address, and phone number – you’ll have to be at least 18 years old. US clients will have to supply their occupation and the last 4 digits of their Social Security number.

For Intermediate, it’s more like opening a bank account: you’ll need to upload a copy of a government ID with photo and a picture of you holding that ID to prove that it’s really you. Plus proof of address. US citizens will have to provide their whole SS number. 

For Pro, you need to fill in a KYC questionnaire with a lot of financial information and set up two-factor authentication (sign-in 2FA). 

The difference between the different accounts is as follows:

It only takes a minute or two to be verified with Starter/Express, while it may take five minutes or so to get Intermediate verification. Pro will take a few days. 

These requirements will vary from country to country.

There’s no minimum deposit, but of course you have to have money in your account to start trading. 

There’s no fee for deposits using most methods, e.g. SWIFT, bank transfer (ACH), SEPA (Single Euro Payment Area), CHAPS, and crypto deposits using BTC or ETH. There are sometimes fees for depositing in some of the newer or more obscure cryptos. Credit/debit card deposits and purchases are only available for Intermediate or Pro account holders. US clients can only use debit cards, not credit cards. 

Kraken accepts deposits in USD, EUR, CAD, GBP, CHF, and AUD.

The minimum purchase is $10 worth or thereabouts in each currency. 

One of the best ways to buy crypto is to link your bank account directly to your Kraken account. Using that set-up you don’t have to fund your account at all, and you’re able to trade easily.

Withdrawals

Kraken does charge withdrawal fees. You can withdraw money from your Kraken account in either fiat or cryptocurrency. The cost depends on the currency and the method of transfer.

For example, using SWIFT might cost anywhere from $4 to $35, depending on your bank, with a minimum withdrawal of $100 or $150. A BTC withdrawal might cost 0.000150 BTC, while an ETH withdrawal would be 0.00170 ETH. Fees for withdrawals in other cryptos can be found here.

These fees seem to be well within the norm for the industry or maybe even at the lower end. 

Trading Platform

Kraken has two platforms: Kraken and Kraken Pro. (There’s also Kraken Classic, but that’s just for long-term clients who are used to that platform, not new clients, so we’ll ignore it.)

 You can easily switch between them when using their desktop platform by clicking on the App switcher in the right-hand corner of the screen (what looks like a tic-tac-toe box). We’re going to ignore 

Kraken is their basic platform. It’s designed just to buy and sell cryptos quickly and easily and not much more. It has a basic trade panel, a page with the prices of various cryptos, deposit options, a record of your trading history, and account settings. It’s well organized and easy to use. Using it, you can:

• Buy, sell and convert cryptocurrencies instantly via its simple, straightforward interface
• Track your portfolio
• Deposit and withdraw funds

That’s about it and that’s about all the average beginner would want to do. 

Kraken Pro is their more advanced platform for more advanced traders who want more trading options and more sophisticated graphics. You can

• Trading: trade spot, margin, and futures

• Funding: deposit and withdraw funds and crypto, as well as stake and unstake assets (outside the US)
• Charting: A variety of charts and indicators are available.
• Customization: Create a trading display based on your preferred trading strategies and technical analysis
• Security: use additional security features catering to the professional traders such as Global Security Lock and API settings.
• Trading: have access to full featured Order Form system
• Order Types: a full suite of trading types, including Market Limit and Take profit.
• Kraken Pro App: our advanced trading app named “Kraken Pro” offers the same powerful interface from the convenience of your mobile device.

There’s also a separate futures trading platform, but that may be the same as the futures available in the Kraken Pro platform. 

The order book for both these platforms is the same. 

For orders, on both platforms you can choose between “Simple” and “Advanced” orders The two choices give you different alternatives on the two platforms.

On Kraken, the “Simple” orders consist of market and limit orders. The “Advanced” orders including take-profit, take-profit-limit, stop-loss, and stop-loss limit orders

On Kraken Pro, the “Simple” orders include take-profit and stop-loss orders. The “Advanced” orders include a number of orders not available on the Kraken platform, such as Conditional Close, Order Start/Expiration Time, Trading Fee Currency Preference and Post Limit orders, among others. The Post Limit order is important. It prevents placing a limit buy order that instantly matches against the sell side of the order book (and vice versa for sell orders) which would result in taker fees. The order will either get posted to the order book or be cancelled. This ensures that the person posting it gets the maker fee.

Both these platforms are also available on both desktop (browser) and mobile (Android and iOS). 

The Kraken mobile platform is pretty basic. It doesn’t have any special orders or charting tools. Pretty much all you can do is just send orders to Kraken. The Kraken Pro mobile platform is much more complete but perhaps too much so for beginners.

Login and security: You have to use two-factor authentication (2FA) the first time you log in. That’s good, but some people would prefer to require that every time you log in. 

Trading Tools 

There’s not much for this section. Kraken Pro offers some 30 charting tools, mostly the best-known technical analysis indicators. 

API trading is available.

Social trading

No social or copy trading alternatives.

Education and information

Kraken’s educational offering is OK but it’s not a reason in itself to deal with the company. 

There is a Learn page, but there aren’t that many articles or educational videos to explain the very complicated subject that they’re dealing with and they aren’t updated all that often. There are maybe 8 or 10 articles, plus guides to 22 different coins. There’s a blog that seems to have a lot of articles on NFTs. 

There is a Kraken YouTube channel with some 233 videos. A number of these are evergreen educational videos on subjects like Introducing Crypto, how to use the site, what is staking, crypto and your phone, etc. Some are past webinars. And some are the Chairman, Jesse Powell, pontificating on some subject or another. 

That being said, I wonder if education is really as important for crypto exchanges as it is for FX brokers. After all, there’s very little news on a day-to-day basis that moves cryptos specifically. You’re basically just betting on which one will go up or down. Explaining what distributed finance and blockchain are, plus the difference between each coin, is probably enough. After that it’s just technical analysis, which is not specific to crypto sites. 

Customer Support

Customer support at Kraken is available 24/7 via:

• Chatbot
• Live chat
• Email (ticketing)
• Phone

This is better than many other companies, some of which don’t have a phone option or are only available 24/5. 

I found the chatbot to be surprisingly helpful – normally these are simply annoying and unable to answer my question. (Maybe it had more to do with my question than the chatbot). However when I asked a question it couldn’t answer and the chatbot said it would put me in touch with real live human being, I gave up waiting for the person after about an hour and went to sleep. Such long waits for customer support are apparently common complaints. 

The ticketing system works kind of like the chatbot: you type in your question and it gives you a choice of the various FAQ topics related to that, which in many cases may be enough to answer your question. If not, then you send in your question. Responses are pretty quick.

Large traders, such as those who use the OTC market, get a dedicated representative. 

Kraken doesn’t participate in any public forums. 

As mentioned above, Kraken has a 3.0 rating on Trustpilot, which isn’t great but is better than their competition. 

Is Kraken a good broker for beginners?

Kraken is good for both beginning and more advanced traders.

Beginning traders will appreciate the simplicity of Kraken’s basic platform. It’s designed for people who just want to buy and sell cryptocurrencies and don’t need a lot of complicated charts or sophisticated orders. There are more than enough cryptos, stablecoins, and NFTs listed on the exchange to fulfil your fantasy of becoming the next Sam Bankman-Fried. Plus, the security and the pricing are among the best in the industry.

There are two negatives for those just starting out. First is the educational materials. These lag behind some of Kraken’s larger competitors. Still, given the amount there is to learn, it should be enough to get you started. Secondly, you can’t buy cryptos with your debit card, which may be a deterrent if you’re just looking for an exchange where you can buy cryptos on the spur of the moment. (You can link your Kraken account to your bank account however, in which case transfers are free.) 

The KYC requirements may seem a bit onerous, but they help to keep the bad guys out so don’t let them deter you.