Kraken Review: Fees, Regulation & Security (2024)

What is Kraken?

Kraken, legally known as Payward, Inc., is an American cryptocurrency exchange founded in 2011 by Jesse Powell, along with co-founders Thanh Luu and Michael Gronager. Jesse Powell, who previously consulted for the now-defunct Mt. Gox, anticipated the collapse of the platform and developed Kraken as a secure alternative. 

The platform officially launched in September 2013, initially supporting Bitcoin, Litecoin, and Euro trades, and quickly expanded its offerings to include margin trading and additional cryptocurrencies. The company has been a leader in regulatory compliance, being granted an SPDI charter in Wyoming in 2020, making it the first exchange in the U.S. to hold this license. 

Despite facing regulatory scrutiny and significant fines, Kraken has maintained its position as a major player in the crypto space, valued at $3 billion as of January 2024. The platform continues to expand its services, including Kraken Institutional, staking options, an NFT marketplace futures trading and a proprietary crypto wallet.

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Kraken Features

‍Kraken delivers a range of advanced tools tailored to various trading strategies. It supports spot, futures, and margin trading, offering flexibility for different market approaches. The platform also includes staking services, allowing users to earn passive rewards on their crypto holdings. Below is a detailed overview of Kraken's key features:

• Multiple Trading Types: Engage in spot trading, or use margin and derivatives with up to 5x leverage to amplify your positions.
• Crypto Staking: Earn up to 10% APR on 24 cryptocurrencies, with options for both flexible and fixed terms.
• Multilingual Customer Support: Access Kraken’s platform and 24/7 support via live chat in 11 languages, including English, Spanish, and Chinese.
• OTC Desk: Institutional investors can trade large volumes directly with a dedicated account manager, benefiting from tighter spreads.
• Kraken Wallet: Users can access and store their digital assets on multiple blockchains, including Explore Bitcoin, Ethereum, Solana, Arbitrum, Base, Optimism and Blast.
• NFT Marketplace: Trade thousands of NFTs without gas fees, featuring popular projects like BAYC, Azuki, Moonbirds, and Doodles.
• Mobile App: Buy, sell, and stake cryptocurrencies using the Kraken mobile app, available on iOS and Android with all the features of the web platform.
• Kraken Pro: Utilize the Kraken Pro platform for advanced trading, offering a customizable interface with access to spot, margin, and derivatives markets.
• Proof of Reserves: Kraken publishes proof of reserves quarterly, confirming that all user assets are held 1:1 on the platform.
• Widespread Availability: It can be used in 180 countries worldwide, making it one of the most accessible trading platforms available.

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Is Kraken Safe?‍

Kraken is known for its security measures and extensive global licensing, ensuring that your investments are protected and compliant across various jurisdictions. It employs advanced security protocols, including ISO/IEC 27001:2013 certification and SOC 2, Type 1 examination, to safeguard funds and personal information. Here is an overview of their global licenses:

• United States: Registered as a Money Services Business with FinCEN (Payward Interactive, Inc., MSB Registration No. 31000270997766).
• Canada: Registered as a Money Services Business with FINTRAC (Payward Canada, Inc., MSB Registration No. M19343731).
• United Kingdom: Registered as a Cryptoasset Firm with the Financial Conduct Authority (FCA) under the Money Laundering Regulations (Payward Ltd., FRN 928768).
• Ireland: Registered as a Virtual Asset Service Provider (VASP) with the Central Bank of Ireland (CBI) (Payward Europe Solutions Limited, Registration No. C468360) and licensed as an E-Money Institution (EMI) with the CBI (Payward Ireland Limited, Registration No. C453020).‍
• Italy: Registered as a VASP with the Organismo degli Agenti e dei Mediatori (OAM) (Registration No. PSV35).‍
• Spain: Registered as a VASP with the Banco de España (BoS) (Registration No. D892).‍
• Netherlands: Registered as a VASP with De Nederlandsche Bank (DNB) (Payward Continental Services Limited, Registration No. R194010).‍
• Belgium: Operates on a cross-border basis using the above registration with the CBI.‍
• Australia: Registered as a Digital Currency Exchange (DCE) with AUSTRAC (Bit Trade Pty Ltd., ABN 42 163 237 634 & ACN 163 237 634).‍
• Middle East: Holds a Financial Services Permission (FSP) in the Abu Dhabi Global Market (ADGM) from the Financial Services Regulatory Authority (FSRA) to provide custody for digital assets and operate a Multilateral Trading Facility (Payward MENA Holdings Ltd., FSP No. 190008).

The exchange also regularly publishes its reserve holdings to highlight that all users’ funds are held on a 1:1 basis and accessible at all times. Its security, transparency and regulatory compliance make it a secure and trustworthy platform.

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Fees Schedule

Kraken has a tiered based fee structure, with costs varying based on the user's monthly trading volume. Lower fees are offered to high-volume traders, making it a popular choice for professional investors. Below is an overview of the costs of the platform:

Trading Fees

• Maker Fees: These start at 0.16% and can decrease to as low as 0% for those with high trading volumes.
• Taker Fees: Begin at 0.26% and can go down to 0.1% for larger volume traders.
• Instant Buy Fees: When using the Instant Buy/Sell feature, fees are included in the displayed price, and they can vary depending on factors such as payment method, market conditions, and order size.

Funding Fees

• Crypto Deposits: Generally free, though a few exceptions exist depending on the specific cryptocurrency.
• Crypto Withdrawals: Fees are applied to cover the cost of transferring the asset onto the blockchain.
• Cash Deposits and Withdrawals: Fees vary depending on the currency and method used, as they are set by Kraken’s funding providers and range between 1% - 4%.
• Debit and Credit Card Purchases: 2% fees apply when using a card to buy crypto through Kraken’s platform.

Additional Fees

Kraken may charge a 3% fee for converting balances that are less than the minimum order size using the “Convert Small Balances” feature. Additionally, the fee structure includes spreads, which are incorporated into the price for instant buys, sells, or conversions, and these can vary based on several factors, such as market conditions and order size.

The costs are designed to be competitive while providing flexibility for various trading strategies. Whether you are making a quick trade, setting up a complex order, or using margin, Kraken’s fees are straightforward and align with industry standards, offering value to traders at all levels.

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What is Kraken Pro?

Kraken Pro is designed for advanced traders who require a professional trading environment with robust features and tools. It offers a sophisticated interface that allows users to engage in a wide range of trading activities, including margin and futures trading, with access to deep liquidity and competitive fees. Here’s a short summary:

• Advanced Trading Interface: Kraken Pro provides a full-featured order book system with multiple order types such as Market, Limit, and Take Profit. 
• Low Fees: Kraken Pro uses a maker-taker fee model, with fees ranging from 0.00% to 0.26% based on trading volume, incentivizing higher trading activity with reduced costs.
• Margin and Futures Trading: Users can trade with leverage, enhancing their positions with up to 5x leverage on margin trades and accessing futures markets for more complex trading strategies.
• API Access: For traders who require automated trading or more detailed data access, Kraken Pro offers customizable API settings, enabling seamless integration with trading bots and other tools.
• Mobile App: The Kraken Pro app delivers the full power of the desktop experience to mobile devices, ensuring that traders can manage their portfolios and execute trades from anywhere.
• Security Features: Enhanced security options, such as Global Security Lock and customizable API key permissions, provide professional traders with the tools they need to protect their assets.

Kraken Pro is ideal for those who need a more powerful and flexible trading platform, offering a range of advanced features that cater to the needs of serious traders, whether on desktop or mobile.

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Kraken Staking Options

Kraken’s staking feature allows users to earn passive rewards through a process called staking. This feature is available on a wide range of cryptocurrencies, offering competitive Annual Percentage Returns (APR) with no lock-up periods, meaning your funds remain accessible for trading, withdrawal, or use at any time. These are the supported staking tokens:

• Algorand (ALGO): 1-4% APR
• Cardano (ADA): 3-6% APR
• Celestia (TIA): 3-6% APR
• Cosmos (ATOM): 6-10% APR
• Dymension (DYM): 1-4% APR
• Ethereum (ETH): 1-4% APR
• Flare (FLR): 0.1-2% APR
• Flow (FLOW): 2-5% APR
• Kava (KAVA): 3-6% APR
• Kusama (KSM): 9-13% APR
• Mina (MINA): 7-10% APR
• Polkadot (DOT): 7-11% APR
• Polygon (MATIC): 1-3% APR
• Secret (SCRT): 6-10% APR
• Sei (SEI): 1-4% APR
• Solana (SOL): 3-5% APR
• Tezos (XTZ): 5-8% APR
• The Graph (GRT): 4-6% APR
• Tron (TRX): 1-4% APR
• Bitcoin (BTC): 0.1% APR
• Euro (EUR): 3.5% APR
• Tether (USDT): 5% APR
• US Dollar (USD): 5% APR
• USD Coin (USDC): 5% APR

Kraken’s staking service is a convenient way to make your crypto work for you by earning rewards on your assets. With a variety of supported tokens and competitive APRs, it’s an effective strategy to grow your holdings passively.

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Bottom Line

In conclusion, Kraken is a comprehensive exchange that caters to both beginner and advanced traders with a wide range of features, including spot and futures trading, staking, and an NFT marketplace. Its global reach, strong regulatory compliance, and commitment to security make it a trustworthy platform for managing digital assets.