Is Kraken The Most Secure Cryptocurrency Exchange? Let’s find out!
Kraken has been building in popularity recently because of its Bitcoin to Euro trading volumes. However, this cryptocurrency exchange started in 2011 and is one of the oldest exchanges that is traded internationally. Over the years, Kraken has earned a reputation for being secure and easy to trade for those who like fiat currencies.
The History of Kraken Exchange
Headquartered in San Francisco, California, Kraken is known for its security features. One of the things that defines Kraken is its CEO Jesse Powell. He started the cryptocurrency in 2011 and publicly launched Kraken in September 2013. He wanted to create a more reliable, secure cryptocurrency that would have a proof of reserves audit system.
As an international exchange, Kraken was made available in US, Canada, Europe, and Japan. However, the main difference is that Kraken deals in fiat currencies more than its competitors. This means that you can trade Kraken into US dollars, Canadian Dollars, Euros, British-Pounds, and Yen.
In 2014, Kraken became the top exchange for Euro trade volume. Within the same year as its launch, Kraken was listed on the Bloomberg Terminal. Traders trusted Kraken more than other cryptocurrencies due to its resilience to DDOS attacks and other problems that plagued its competitors.
Is Kraken Reliable?
Kraken is rather secure and has avoided major hacks since its launch. One example of its security is the fact that creditors using the Mt. Gox exchange received their claims through Kraken. This was after Mt. Gox filed for bankruptcy protection and needed to send its claims securely to creditors.
For those who use this exchange, there is also a dark pool. This is a private securities exchange that allows for anonymous trades amongst large financial institutions and individuals with a certain net worth. It’s one of the only cryptocurrencies to allow this type of trading.
Noteworthy Features of Kraken
If you are thinking about buying Kraken, it’s very similar to Bitcoin, Litecoin, and Ethereum. However, it has a larger range of fiat currencies. There are also options for trading margins if you are an experienced cryptocurrency user.
Users of Kraken can feel secure with their trades due to cold storage techniques. This is the first step to ensuring that your money is secure, but Kraken also uses PGP/GPG encryption. The platform also supports global settings lock, two factor authentication, and a private master key. These features provide the maximum security available currently for cryptocurrency exchanges.
Multiple Trading Options
If you are familiar with Bitcoin trading, then you will like how Kraken conducts margin trading. You can leverage your trades up to five times without shorting. Users also get automated trading and stop-loss orders. These features are primarily used by experienced cryptocurrency traders/
Kraken has an appealing interface and lots of documentation, which is beneficial for anyone just starting out in cryptocurrencies. The charts in the interface allow users to plan advanced trading. All of this is also accessible through the iOS mobile app. You can use iPhones and tablets to trade Kraken.
Fast funding and high trading volumes make Kraken a very popular cryptocurrency. With such high levels of liquidity, traders can easily set up their accounts and start trading across a number of markets. The exchange also uses Proof of Reserves Audits. This is one of the reasons that it has become known for its verified auditing.
Unlike some of other restricted cryptocurrencies, Kraken does not limit its exchange as much as competitors. Traders in the US, Canada, Europe, and Japan can use Kraken to trade with US and Canadian Dollars, the Euro, British-Pound, and Japanese Yen.
CEO Jesse Powell made some changes to the platform in 2017 so that it would be even more supportive of its growing user base. The platform has 24/7 support, all year-round. You can call support for any issue related to the platform or trades.
What Currencies Does Kraken Support?
Most traders using Kraken today also trade with Bitcoin and Ethereum. The majority of trades are cashed into Euros and USD. However, you can use Kraken with a number of different fiat currencies as well as cryptocurrencies.
Currently, Kraken supports trading in the following cryptocurrencies:
Bitcoin Cash (BCH)
Ethereum Classic (ETC)
Augur REP tokens (REP)
The most frequent testimonials share a common theme with trades in Kraken. It’s easy to make deposits and withdrawals. You can cash in with CAD, EUR, GBP, JPY, and USD. Bank transfers are the preferred way to receive all payouts. European traders can also use the SEPA payment system.
There are some different rules for margin trading with Kraken, however, you can trade in these currency pairs as follows:
Advanced users can use margin trading very successfully with the chart software that Kraken provides. If you are a high volume trader with a high net worth, there is a secret pool that is also available.
Signing Up for Kraken and Login
You can set up a Kraken account online pretty easily. You simply need your email address, name, and password. However, there are two account types depending on what you want to do with Kraken.
Tier 0 Accounts
These accounts are created with a simple sign up. You can browse around the website, check out the charts, but you can’t use the account for any trading. This means you won’t be able to deposit or withdraw.
Basic Kraken Accounts
These accounts are setup with your name, date of birth, address, and phone number. These are Tier 1 and Tier 2 accounts. You can deposit and withdraw in digital currencies. If you want to trade, you can do so in both fiat and cryptocurrencies.. However, with a Tier 2 account and your country, fiat funding may also be available. Only some clients in certain countries are able to make bank deposits and withdrawals at the Tier 2 level as well.
Advanced Kraken Accounts
If you want the full power of Kraken, you really need a Tier 3 account or above. These accounts have full currency funding, and your funding limits are much higher. However, you will have to provide more identity proof and residency documentation. This is to protect you and other traders, as well as abide by country restrictions. Tier 4 accounts have much higher limits on trading and funding, but only corporate traders and individuals who trade in high volumes can trade at this tier. You have to provide KYC documentation and a signed form to trade at this level.
It typically takes up to 24 hours to get verified, but it could take longer if you are seeking a Tier 4 account. You can always reach out to Kraken’s customer support through their 24-hour helpline.
Adding Your Bank Account and Funding
You can add a bank account to Tier 2 accounts and above. This allows for wires and bank transfers for depositing and withdrawing funds. Once you have added a bank account, you can make a deposit and start trading.
How to Deposit Money for Kraken
There is a section built into the mobile app and desktop site that allows you to fund your account. You just click “Funding” after logging in and then select how you want to deposit. You can deposit via bank transfer or use a cryptocurrency wallet to make a transfer. These transfers are typically instant.
Is Kraken Trading Any Good?
You can also quickly make trades on the website or mobile app by logging into your account and clicking on “Trading” in the menu area. You simply select “New Order,” and then look for the currency that you would like to exchange, then add on your preferred currency for payment. You can enter any quantity you want to purchase and then select the order type. Once ready, just click on a limit or market order, then click on the confirmation button to complete the purchase.
What are Kraken’s Fees?
You can trade in most currencies with Kraken and have transfer fees, which are determined by the cost of the transaction. These may slightly change depending what funding partners require for fees as well. Currently, Kraken fees are as follows:
- USD Bank Wire: Deposit$5 USD or $5 USD for Withdrawal (Only in US)
- EUR SEPA: Free to Deposit or €0.09 to Withdrawal (EEA Countries only)
- USD Bank Wire: Deposit $10 USD to Withdrawal $60 USD (Outside USD Only)
- EUR Bank Wire: Deposit €10) (Outside US Only)
- JPY Bank: Deposit Free with ¥5,000 deposit minimum to Withdrawal ¥20 (Japan Only)
- CAD: Wire Deposit Free to EFT Withdrawal $10 CAD fee, $25k CAD daily max)
There are also unique fees for cryptocurrencies that you can trade in on the site. These include:
- Ether: Deposit – Small fee to transfer ETH to Kraken wallet. Withdrawal costs Ξ0.005.
- Ripple: Deposit is free. Withdrawal costs Ʀ0.02.
- Litecoin: Deposit is free. Withdrawal costs Ł0.02.
- Bitcoin: Deposit is free. Withdrawal costs ฿0.001.
- Tether: Deposit is free. Withdrawal costs USD₮ 5.
- Bitcoin Cash: Deposit is free. Withdrawal costs ฿0.001.
Kraken Trading Fee Structure
As with all cryptocurrencies, Kraken a typical fee structure. However, to those who are just starting out with these exchanges, it can seem like a complex grid. Kraken provides a detailed guide to trading and the fee structure, so that you understand why you are charged different fees based on volume and market.
For the most part, your trades will likely not surpass 50,000 in volume of any specific currency, which means that you will have a maker fee of 0.16% as well as a taker fee of 0.26% respectively. These are for any Bitcoin exchange that you make through the fiat currencies that Kraken supports on the website. These fee structures are typical for most of the cryptocurrency trading pairs, so it’s nothing new.
However, if you are an advanced trader, then you can use the trade chart to understand fees for volumes greater than 50,000. The fees drop considerably at this point. You typically have a 0.14% and 0.24% for these higher volume trades, but the rates continue to go down depending on your volume. If you plan to trade in volumes over 10,000,000 then you won’t have any maker’s fee but may incur a 0.10% takers fee.
Fees are calculated on a per-trade structure. Your trading volume will be calculated first for trades made within a 30-day period.
There are also trading limits which users should understand as they set up an account and start to fund and trade with their Kraken accounts.
What are Kraken’s Trading Limits?
Kraken has a verification system that defines all trading limits. These limits are set up for beginners and advanced users to protect them from making costly trades within the first months of opening a Kraken account. However, you can always work with Kraken to upgrade your account, especially if you are an advanced cryptocurrency user who wants to trade in higher volumes.
Here is an overview of the trading limits by account tier:
This is the most basic account. It doesn’t allow you to trade at all. This is mainly to get you set up with Kraken and verify your email address. Once you have set up this basic account, however, you can upgrade to Tier 1 or Tier 2.
You can deposit and withdraw with a Tier 1 account but only in digital currencies. This means that you can’t fund your account with your bank. You can trade in cryptocurrencies and fiat currencies. In order to upgrade your account, you’ll need to provide more information about yourself to Kraken, including your full name, county, phone number, and date of birth.
This is basically the same trading limits as Tier 1. However, if you live in a certain country, then you may be able to fund your account with a bank. This is typically only for Canadian and European traders.
This is an advanced user account that allows you to deposit, fund, trade, and withdraw with all currencies available. You can make higher volume traders as well. You will have to provide ID to unlock Tier 3. This is because users in US, Germany, Japan, and Canada need ID to deposit and trade in fiat currencies.
This is the most advanced account, and it’s for high volume traders. Corporations and individuals may have access to Tier 4 upon providing signed form and KYC documentation. These accounts typically have 50,000 trade volume or higher.
Kraken vs Competitors
There are a variety of cryptocurrency exchanges out there where you can purchase and trade in digital currencies. However, when it comes to safety, features, and support, cryptocurrency lovers get a better deal with Kraken.
There are a few reasons for this, but the greatest example is the Mt. Gox bankruptcy and various reviews by users who have chosen Kraken over competitors.
Mt. Gox was a Bitcoin exchange that went under in 2014 after announcing that $450 million in Bitcoins had been stolen or lost. The bankruptcy started a claim where creditors were able to receive their missing Bitcoins through Kraken. The CEO discussed the bankruptcy in 2015, when he explained that Kraken Exchange was appointed by 127,000 creditors from Mt. Gox.
In addition, the company has had a sterling reputation for handling customer privacy and ruling in favor of their users in BTC debates. Their position has remained neutral as an exchange, providing the user with control over their trades. Some competitors have tricked users into giving up data in order to pay into affiliate associates. Kraken does not have affiliates or give up their users’ information.
There are also a few security features to consider when looking at Kraken over competitors.
- Kraken is trusted in its handling of BTC claims and has helped the creditors of Mt. Gox receive payouts.
- Probably the most secure sign-in features is the ability to use Google’s 2FA app to make secure modifications to your Kraken account.
- A major difference is Kraken’s use of verified proof of reserves. Basically, this means that exchange is actually holding the money that the user has deposited. This means that you have more control over how your money is traded.
- It’s been shown that Kraken holds 85% of funds in cold storage. If any servers failed, then offline funds would still be safe.
- Kraken has private server locations with complex, weaponized patrol. In fact, there has never been a break-in or major DDoS attack.
Some people have called Kraken the Bitcoin expert trading platform. That may be because of its ability to trade in higher volumes and multiple currencies. However, the difference with Kraken is its security and trading abilities. You truly have vast power to trade in different markets and use all the different cryptocurrencies for funding, trading, and payment.
Do People Trust Kraken’s Wallet?
This exchange has been online since 2011 and has never had a major attack. Users feel safe with the platform due to its security, so the wallet is pretty secure as well. Kraken spent many years building up its customer support and reputation.
As with any cryptocurrency investment, you should research any wallet hacks or security breaches that could cause your trades to fall in jeopardy. While there was an issue with increased traffic that caused interface problems in 2017, a major update in December 2017 has removed these issues and allowed users to trade without issue.
In general, most traders do not use wallets to keep their investments due to security issues and hacks. However, if you were going to use a wallet, Kraken is considered to be one of the most secure due to its headquarters and server location in San Francisco. The CEO Jesse Powell has spoken out about security issues in the past and has always supported its customers, which has made a positive impression on users. Customers say that they can trust Kraken to keep their investments secure in online reviews.
Conclusion: Should You Use Kraken Exchange?
Beginner and advanced users can use Kraken for cryptocurrency trading. However, if you learn the platform well and want to make expert trades, this is almost certainly a better exchange than competitors. This is because you can make automated trades and higher volume trades across a variety of fiat currencies.
If you are looking for a simpler interface and something that caters to beginners, you will probably like the mobile app at least for simple buys and payouts. If you want to make daily trades and have high volume trading over 50,000 trades, then you will like the advanced trading features with Kraken.