Kraken describes itself as the “largest Bitcoin exchange in euro volume and liquidity.”
Founded in July 2011 by Jesse Powell
Headquartered in San Francisco
Service area – North America, (Excluding New York because of the BitLicense), Europe and Japan.
Easy to use its entry level services, such as price charts and statistics.
2nd largest exchange in terms of volume
Kraken was the first exchange to carry out proof-of-reserves auditing
Popular platform for professional crypto traders and occasional users
Kraken has gone through three funding rounds and raised $6.5 million in capital from 13 investors, including Money Partners Group, Blockchain Capital and Digital Currency Group. The company has also completed five acquisitions, including crypto market visualization platform Cryptowatch, Bitcoin exchange Coinsetter and Dutch exchange Clevercoin.
Following the bankruptcy of Mt. Gox, the trustees of the receivership picked Kraken as the platform through which claimants could apply to receive lost funds.
US users can deposit and withdraw through bank wire service, which costs $5. Bank wire transfers from outside of the US cost US$10, €10 or £10.
If you are in Canada, you can deposit or withdraw Canadian dollars (CAD) through bank wire at no cost. Users in the European Economic Area can deposit and withdraw using free SEPA wire transfer.
Japanese users can deposit and withdraw any amount below ¥5,000 through bank deposits free of charge.
The following are the advantages of using Kraken
- Kraken has an excellent rank (5th) on the list of leading cryptocurrency exchanges
- Support for an increasingly wide range of high-volume cryptocurrencies and fiat.
- Bitcoin Cash credited to all users promptly & now open for trading
- Free deposits for Euro, Canadian dollar, and Japanese yen
- Super fast SEPA withdraws:
- Reasonable fees: fiat & cryptocurrency trades/withdrawals priced competitively
- Security: two-factor authentication is encouraged using Google’s 2FA app
- Supports margin trading for users seeking more exposure with less upfront capital
The following are the disadvantages of using Kraken:
- The user interface is not as beginner friendly as other exchanges like Coinbase or CEX
- Cumbersome verification process taht takes time.
- Up to $15 fees for every fiat deposit and withdrawal through SWIFT (international banks)
- Occasional arbitrary closure of accounts has been reported (when fraud is suspected), though this not as common as on Coinbase
- Slow execution of orders, sometimes taking up to 30 seconds, a problem for day traders
- Customer support faling to scale with large influx of new users.
- Kraken holds the private keys to your account’s crypto address (like all exchanges)
Interview of Kraken CEO
The above discussion with Kraken CEO, Jesse Powell, dates from 2015 and was recorded at the CoinSummit conference.
CRYTPCURRENCIES Supported on Kraken
Users can buy and sell cryptos, as well as margin trade. Here are the 15 crypto coins currently supported by Kraken:
- Bitcoin (XBT)
- Ethereum (ETH)
- Monero (XMR)
- Dash (DASH)
- Litecoin (LTC)
- Ripple (XRP)
- Stellar/Lumens (XLM)
- Ethereum Classic (ETC)
- Augur tokens (REP)
- Iconomi (ICN)
- Melon (MLN)
- Zcash (ZEC)
- Dogecoin (XDG)
- Tether (USDT)
- Gnosis (GNO)
- EOS (EOS)
Fiat currencies supported on Kraken
Fiat deposits and withdrawals are completed through SEPA, Swift, and bank wires.
Who Uses Kraken ?
This review of Kraken would not be complete without giving you an idea of where and how people are using the site.
Kraken ranks second after Coinbase in terms of website traffic according to similarweb.com. The exchange comes before Bitstamp, Xapo and Bitsquare, in that order. However, among the top five global cryptocurrency exchanges, Kraken claims the highest mobile use percentage (38.46%). Each of the others receives less than 27% of their traffic through mobile devices.
The Kraken website receives 470,381 visitors daily, with the majority coming from the US (14.53%), France (9.79%), Germany (8.04%), the United Kingdom (6.68%) and the Netherlands (5.52%). Those who visit the site through desktops make up 61.54% of traffic, while the rest comes from mobile devices (38.46%).
In terms of volume, CoinMarketCap usually ranks Kraken as between the fourth and sixth largest exchange. Those most of the time ahead of it include Bithumb, Bittrex, Bitfinex, Poloniex and OKCoin.
Kraken offer the lowest fees compared to all other major exchanges. For example – when I withdraw Euros through SEPA bank transfer I’m only charged 0.09€ by Kraken. That’s pretty amazing compared to the hefty 10€ average fee that corporate banking institutions charge their clients. Good job to these guys!
Fees depend on the tier in which your account belongs. The higher the tier and the amounts involved, the lower the fees you pay. Fees are calculated as percentages of trade volumes, and they range between 0% and 0.26%. Both the buyer and the seller are charged fees, with a buyer in a trade paying more than a seller.
The fee amount also depends on the currencies involved. A pairing of cryptocurrencies incurs lower fees than one that exchanges fiat with cryptocurrency.
In addition to percentage-based fees, users pay a flat processing fee of $60 per page for paper copies of communicatio
Creating a Kraken account
Signing up for an account on Kraken is similar to creating an account on most online platforms. As described below, the exchange has included extra features on the signup page to secure and protect user accounts. The platform also meets Know Your Customer (KYC) and Anti-Money Laundering (AML) requirements from US regulators.
The first step when signing up is to input your email address and create a password that is at least eight characters long and includes letters, numbers and special characters. You also have the option to share a PGP (Pretty Good Privacy) public key that the platform can use for added security when sending you emails.
You are also prompted to create a master key that gives your account a second layer of security that includes two-factor (2FA) login protection. This is especially useful when changing passwords or switching devices. The master key can be a password, a Yubikey password or public/private key pair, or Google authentication. You will need to store your master key separate from your other login credentials.
The second step in signing up is to activate your account. You’ll receive an email with an activation key that you then copy and paste into a second form. With this done, you gain access to your account.
The entire process takes between five and ten minutes and is largely smooth and easy to follow.
While Kraken has never had a major security incident like those experienced at Mt. Gox or Bitfinex, in July 2016 several users reported having their accounts hacked and funds stolen. Kraken later reported, however, that almost all the users affected failed to use two-factor login protection.
While Kraken provides users with public addresses for depositing cryptos to accounts, it holds the private keys to those public addresses. Therefore, as a user you have to trust their honesty and capacity to keep your cryptos safe.
Kraken exchange offers five types of accounts (aka – “tiers”). Immediately after you sign up, you get a tier 0 account. What differentiates the different levels is primarily the daily and monthly limits on fiat and cryptocurrency deposits and withdrawals.
The different tiers also expose you to different fee structures. The higher the account tier, the lower the fees you pay per trade. I actually found that upgrading to a different level was far easier than I had initially thought.
The tier 0 account allows neither deposits nor withdrawals of fiat or crypto funds. Therefore you can do little with a tier zero account except access price statistics and trading charts. To really get the feel of Kraken, you need to upgrade to tier 1 account.
With a tier 1 account, you can deposit and withdraw cryptos. There are no daily or monthly limits to how much you can deposit. However, you can only withdraw less than $2,500 worth per day and $20,000 per month. The account allows trading between different cryptocurrencies, but not between cryptos and fiat currencies.
To qualify for a tier one, you need to update your profile with your full name, your date of birth, country of residence and telephone number. You may have to wait from one to three days after providing these details to be verified as a tier 1 account. The waiting period can be longer for people outside North America, Europe and Japan.
When you get a tier 2 account, you are eligible to deposit fiat currency up to $2,000 daily and $10,000 a month. You can also withdraw $2,000 in fiat daily and $10,000 per month.
The amount of cryptocurrencies you can withdraw increases from $2,500 per day to $5,000. The monthly limits go from $20,000 to $50,000.
To qualify for tier 2, you need to share your postal address with the exchange. Just like the previous tier, you may have to wait for several days for approval.
I just love the sizable volumes that this verification level enables – perfect for a serious trader. Indeed tier 3 affords you a daily limit in fiat deposit of $25,000 and a monthly limit of $200,000. The withdrawal limit for fiat currency increases to $25,000 and $200,000 monthly. The amount of cryptos you are allowed to deposit daily rises to $50,000 and monthly to $200,000.
To qualify for a tier 3 account, you need to provide a government-issued ID and verify proof of residence by providing a copy of a utility bill no more than three months old. US citizens must provide a social security number.
You are also required to upload an ID-confirmation photo. This is a picture of you holding the ID you provided for verification, alongside a handwritten, signed and dated note reading: “Only for trading digital currency on Kraken”
This level is reserved for corporate entities or for individuals trading at high volumes. I’ll be honest – I haven’t reached this tier yet and probably never will. Nevertheless, accounts in tier 4 can deposit daily amounts of up to $100,000 in fiat currency and $500,000 monthly.
Withdrawal limits for both fiat and cryptos are $100,000 daily and $500,000 monthly. To get a tier 4 account, you need to contact support.