Kraken Exchange Review For 2021: Is It Safe And Legit
Finding a reliable, secure, and high-quality cryptocurrency exchange can be challenging. It seems that every other week we hear about another platform behind hacked. Pair that with the fact that Bitcoin is constantly hitting new highs, locating a trustworthy exchange becomes imperative.
- Operating Since 2011
- Currencies Supported 56
- Fees 0.16% for makers and 0.26% for takers
- Deposit methods Bank transfer, cryptocurrency
- Fiat currencies Yes
- Verification methods KYC
- Margin trading Yes
- Futures trading Yes
One exchange that seems to tick off all the right boxes is Kraken. This well-known exchange prides itself on the fact that it has never been hacked. With Kraken, users can trade directly from fiat to digital currencies, making transactions a lot easier for those who aren’t familiar with crypto trading.
There are plenty of features available that make Kraken an exchange worth using, no matter your experience level.
In my article, I’m going to provide all the information you’ll need so you can make an educated decision on whether Kraken is the right cryptocurrency exchange for you.
Kraken was established by Jesse Powell in 2011 and launched just a few years later in 2013. Since that time, the platform has become one of the most well-recognized and reputable exchanges in the industry. Located in San Francisco, California, in the United States, Kraken offers users a fully-regulated platform to buy, sell, and trade their favorite digital currencies.
As a regulated platform, Kraken requires its users to pass KYC (Know Your Customer) requirements to trade on the exchange.
Throughout its existence, Kraken has developed a reputation for providing a secure platform for users. It’s no accident that it is one of the more popular choices among institutional investors and day traders.
The exchange is self-monitored, complying with all regulations and rules set forth by the authorities in the US. Kraken is registered with FinCen in the US as a Money Services Business and with FINTRAC in Canada. Additionally, the exchange has offices in cities around the world, including Japan, Singapore, and London.
Kraken features at a glance
Kraken is probably one of the most well-known and well-respected exchanges for buying, selling, and trading digital currencies. They offer funding options, staking, margin trading, liquidity, and 24/7 support for beginners and experienced traders alike.
If you want a trusted exchange that offers plenty of features, you can get started on the Kraken website or download the Android or iOS app today.Visit Kraken
There is no shortage of features on the Kraken platform. Here’s a high-level look at some of the more prominent reasons to use this well-known crypto exchange.
Over the Counter (OTC) Services – Users that trade at high volumes can use the OTC feature with Kraken as a one-on-one service.
Dark Pool – This is an invisible order book where only the trader themselves know their orders. With a Dark Pool feature, users can trade anonymously without showing other traders where their interests lie.
Fiat trading and high liquidity – With Kraken, users can access more than 50 cryptocurrencies across 140 markets. The exchange supports six fiat currencies: Canadian dollar (CAD), Euro (EUR), Great Britain Pound (GBP), Japanese Yen (JPY), Swiss Francs (CHF), and the US dollar (USD).
Forex trading – Not only can users trade cryptocurrencies, but they can also exchange their preferred fiat currency for any of the other six support currencies on the platform.
Customer Support – Users receive 24-hour customer support when using this trading platform. That means, no matter what time of day they run into issues, someone is available to help.
Secure and trustworthy – When it comes to crypto security, Kraken sits at or near the top in its industry. The exchange has never been hacked, so you know your funds and assets are secure.
Trade futures and on margin – Kraken offers both margin trading and futures trading with up to 5x leverage, so advanced users have access to all the tools they need to make the trades they want.
One of the most attractive things about this exchange is its low fees.
Users will quickly appreciate that all fees on the platform are charged per-trade.
Kraken makes use of a typical maker/taker fee schedule, which takes into account the digital currencies being traded along with the user’s past 30-days trading volume.
Trading fees will fall into one of four categories: dark pool trading fees, regular trading fees, stablecoin fees, or margin fees. Standard fees start at 0.16% for makers and 0.26% for takers. However, if a user trades more than $10M each month, they’re eligible for maker fees as low as 0.00% and taker fees a little as 0.10%.
When it comes to stablecoins, Kraken’s fee structure is based on trading pairs. With stablecoins, users pay a fee of 0.20% or less for each trade, whether they’re the maker or the taker. If you do more than $1M in stablecoin trading each month, there’s no fee.
As you can see, Kraken’s fees are on par or better than many of the industry’s major trading platforms. However, keep in mind that the longer a position stays open, the more expensive your trade is going to be.
Withdrawals and deposits
Deposits on the exchange are free for most digital currencies. However, some less common digital coins have setup or deposit fees. These include cryptocurrencies like Chainlink (LINK), Augur (REP), or Gnosis (GNO). For example, Gnosis has a 0.07 setup fee but is free to deposit, while LINK has a 0.6 deposit fee and a 0.6 setup fee.
Anytime you make a withdrawal on the Kraken exchange, you’ll incur a fee. This is perhaps one of the platform’s most significant drawbacks, as its withdrawal fees are more than you’ll find with other options within the industry. They’re not outrageous either, and many feel the other benefits outweigh these fees.
Additionally, the fees will depend on the type of currency. If you want to know all the fees and minimums for withdrawing, you can check out the Kraken website’s fee schedule.
There are also fees for taking out fiat currencies. For a USD withdrawal to your bank account, you’ll pay $5 per transfer. A SWIFT transaction, however, will incur a $35 fee. EUR withdrawals through SEPA will have a 0.09 EUR fee, whereas worldwide SWIFT transactions are 35 EUR. Users can also withdraw CAD, CHF, GBP, and JPY, but the fees will vary based on the currency and transaction type.
Today, the Kraken platform is available throughout the world and offers a wide variety of digital coins and tokens for buying, selling, and trading. CoinMarketCap lists it as the fourth most significant cryptocurrency exchange worldwide, with daily volume regularly exceeding $1 billion.
Kraken supports more than 50 digital assets and coins on its exchange. Here are just a handful of the cryptocurrencies you can buy, sell, and trade on the platform:
- Bitcoin (BTC)
- Ethereum (ETH)
- Dash (DASH)
- Litecoin (LTC)
- Ripple (XRP)
- Cardano (ADA)
- Tether (USDT)
- Tezos (XTZ)
- Eos (EOS)
Even though it’s based in the United States, Kraken is a global platform. However, some of its features may not be available in specific countries or regions. Currently, Kraken is not supported in the following countries:
- North Korea
Additionally, these countries have the ability to create an account, but they may be restricted from certain features:
- Central African Republic
- South Sudan
There are plenty of deposit methods available through Kraken. Among these are fiat deposits and cryptocurrency deposits. Kraken does not support debit cards or credit cards, but there are plenty of other ways to fund your account:
- CHAPS (Same day options)
- Canadian domestic bank transfer (Takes 1-3 days)
- FewWire (1-5 business days)
- FPS/BACS (0-3 days)
- Cash via Canadian post (1 hour)
- InterFin (0-10 minutes)
- SIC (almost instant during business days)
- Silvergate Exchange Network (Nearly instant)
- SEPA (0-5 days)
- SWIFT (2-5 business days)
The platform takes its security seriously, as evidenced by the fact that it has never been hacked. The site has only experienced one interruption, which happened over three years ago in January 2018. I don’t know about you, but I’d say one time in 10 years is pretty darn good. Plus, it was offline to perform a system upgrade.
If that’s not enough proof that Kraken is serious about security, here are some of the other measures the site has taken to ensure that the risk of hackers are mitigated:
- New deposits are transferred directly to cold storage wallets, which are physically separated from any connected system.
- A small amount of coins are stored in semi-cold wallets. These are stored on locked drives that reside on defended machines.
- All wallets in all data centers are encrypted.
- The vast amount of coins are kept in cold wallets. Only coins needed to maintain liquidity are stored in online wallets.
Kraken has taken additional measures to protect user accounts on its platform. The following features are on the exchange, so accounts have the utmost security at all times:
- All documents used for verification are uploaded onto secure servers, which are kept in isolated locations.
- Login and password protection keeps hackers from accessing your account information.
- Two-factor authentication is used for logins, funding, trades, and withdrawals.
- PGP/GPG encryption for all email communication.
- Universal 2nd Factor verification, which is one of the most secure ways to keep your account safe through the use of hardware like Yubikeys.
- Global settings account lock, which prevents changing account information without appropriate verification and confirmation.
- All user data is stored and encrypted and only accessible through multiple security systems.
And if all these protections aren’t enough, the exchange also uses additional measures to ensure that it’s legally compliant. This includes its financial security and system security. Plus, the platform performs daily backups of all user data, which helps to reduce the likelihood of an exchange breach significantly.
Kraken schedules regular audits on its platform to ensure that it is providing its users with a safe and secure exchange. This includes confirming the validity of new cryptocurrencies before they are onboarded.
The exchange’s security practices are among the best in the industry, regularly scoring an A on the ICO Exchange Security Rating report. This report measures the platform’s security capabilities, along with other essential features. Overall, Kraken is a secure exchange that ranks at or near the top of all exchanges.
Is Kraken safe?
One of the most significant selling points Kraken has to offer is the fact that the platform has not suffered a security breach. Even though other exchanges, like Mt. Gox, have been hacked, Kraken has managed to avoid the same fate. This is no small feat, considering the sheer number of attempts that are made daily against cryptocurrency exchanges around the world.
So how has Kraken managed to prevent this type of attack on its platform?
For starters, the exchange relies on rigorous processes and procedures for all security aspects.
One example is through the use of its cold wallets. User funds are kept in a secure, offline location. This means hackers only have access to a limited amount of funds if they happen to gain access.
Additionally, the platform uses locked servers in secure data centers that are protected by armed personnel. All data stored on servers are updated, encrypted, and part of a separate network. That means members of staff only have access to your account for verification. No one can view anything else in regards to your account.
To ensure there are no areas susceptible to attack, Kraken performs regular testing against its own platform. This testing is performed by blockchain professionals and cybersecurity experts.
Lastly, the exchange aims to protect against the possibility of liquid shortfalls. To prevent this, the exchange keeps a substantial amount of reserves on hand in the event that a “bank run” occurs.
In addition to its security and safety, Kraken also gives users some extra features that they can enjoy. Let’s take a look at a few of these additional features.
In its simplest terms, staking is taking the funds or crypto in your account (i.e., Cardano) and locking it up so that it can’t be traded or moved.
As a result, you earn interest on the amount you’ve set aside. If you’re new to cryptocurrency, this is a great way to learn about staking and how it works. Not many platforms offer this feature, so Kraken is setting itself apart by doing so.
A second feature available on the Kraken platform is the ability to trade futures. This is how you can maximize your returns by committing to buy an asset on a specific date at a particular price. Essentially, it’s a bet that you’re wagering on the value of an investment in the future.
While this is not a feature beginners should jump right into, it’s a great option if you want to expose yourself to more advanced trading alternatives.
Last but not least, the platform offers a product it calls Cryptowatch.
This is a premium terminal that offers real-time crypto data, trading, and charting. The tool supports more than 25 different exchanges, so you can always be aware of what’s going on in the market.
The real-time information comes straight from the platforms through their APIs and supports well over 4,000 markets. Basically, it’s a one-stop shop for all your trading needs if you’re a serious investor.
How do you use the Kraken exchange?
The first thing you’ll have to do before using Kraken is deposit funds. Once that is done, you can start buying, selling, and trading on the exchange. For simplicity’s sake, I’m only going to cover a few trading options here, but there are numerous other trading types on the exchange.
The quickest and easiest method to buy, sell, or trade crypto on the platform is through the “Buy Crypto” button located at the top of the site. You won’t be able to purchase all cryptocurrency with this button, but there are still plenty of options. Keep in mind that anything you buy or sell is subject to platform fees, but Kraken lets you know what those are before you complete the transaction.
Follow these simple steps to trade on the platform:
- Choose your currency pair – You can buy your crypto with Bitcoin, Ether, USD, or other fiat currencies. Once you decide which pairs to trade, you can choose them from the quote bar. Remember that the first currency is the base currency, while the second is the quote currency.
- Complete the order form – Once you’ve decided on your trading pair, choose “New Order” and then select the “Simple” form option. Here you can choose between a market order and a limit order. Market orders execute immediately but are subject to higher fees. Limit orders are completed when they reach the price you’ve set. If a matching order already exists, your limit order will execute immediately.
- Order submission – When everything in the order form is filled in, double check your order and click on the “Buy/Sell” button. Here you’ll have a chance to review your order before submitting it.
- Wait for it… – As previously stated, if you chose a market order, your trade will execute instantly. While your limit order may not fill right away, you can view its status in your “Orders” tab.
Is Kraken good for trading?
While on the surface, it might look like the platform isn’t a good place for beginners, don’t let the site fool you. There are plenty of features available, which can be intimidating and confusing. Even advanced traders might discover tools they don’t understand.
With that said, Kraken is an excellent exchange for trading. If you’re just starting out, think of learning how to trade like you would learn how to ride a bike.
You’re going to fall down a few times before you get the hang of it. Start small, then work your way up. Before you know it, you’ll be taking those training wheels off and performing complex trades on your own.
Trading with Kraken is simple and easy and won’t require the use of another exchange. You can deposit fiat or cryptocurrencies and start trading in just a few minutes. Then, you can begin creating limit orders and making trades. As you become more experienced, you’ll learn to take full advantage of all the features the platform offers.
Some platforms have limited functionality. Kraken is not one of them. This extensive exchange has a broad range of features and an interface that is simple enough for beginners to use but advanced enough that experienced traders will enjoy.
Kraken vs. other big exchanges
How does Kraken stack up against other big-name platforms? Let’s do a quick comparison to find out.
When comparing Kraken and Coinbase Pro side-by-side, it’s easy to tell that both platforms are excellent. Even though each platform stands out in its own way, neither has cut corners when it comes to experience, liquidity, or security.
If you’re an institutional investor, it probably makes sense for you to gravitate toward Kraken. It’s better equipped for making large orders, and its onboarding allows you to jump right into the game. Plus, you’ll have plenty of funding options.
That’s not to suggest that Coinbase Pro isn’t a good option. If all you want to do is buy crypto and hold it, this exchange is just what you need. They have plenty of experience if you’re not interested in getting deep into trading on a regular basis.
The platforms are similar in a lot of categories, however, one key area does stand out: fees. Coinbase Pro’s fees are significantly higher than what Kraken offers. Even if you’re just buying some Bitcoin, Coinbase is going to charge more for your purchase.
When comparing Kraken and Binance, it’s important to note that each platform has its own set of pros and cons. Of course, choosing the proper exchange is going to depend on your coin preferences, security needs, and financial goals.
Also, take a step back and seriously evaluate your own experience before you make a final choice. If you’re the type of person who likes to invest in altcoins, Kraken might be the platform for you. Plus, it’s straightforward and easy to use but doesn’t skimp on features.
Binance, on the other hand, is the ideal exchange for more seasoned traders. Additionally, the platform offers a long list of cryptocurrencies and altcoins. It’s well-known that the selection of coins on Binance is tough to beat. You’ll get comprehensive features, low fees, and all the tools an experienced trader could want.