Another of the more popular United States-based exchanges alongside those like Coinbase and Bittrex, Kraken is known for serving an international audience. With support for fiat money including US Dollars, Canadian Dollars, Euros, Pounds, and Yen, traders around the world can enjoy a relatively wide selection of cryptocurrencies and low fees from Kraken’s browser-based platform.
An Introduction to Kraken
Kraken was founded in San Francisco in 2011—an early presence in the cryptocurrency market—and has gained a loyal customer base, though it occasionally experiences service issues. It is one of the top ten exchanges in the world in terms of volume, above Bitstamp and Bittrex, but below larger platforms such as Binance or Huobi.
Getting Started with Kraken
It’s easy to get started with Kraken compared with the rather involved verification processes of other exchanges.
Creating a Kraken Account
The company uses a tier system to sort traders based on how verified they are, or how much personal information they volunteer to Kraken. All traders who sign up and give their email and name, for example, achieve Tier 1 and can deposit cryptocurrency up to a maximum of $2,000 daily. Those in Tier 3 and above have verified their address, supplied a government-issued ID and proof of residency, and can deposit up to $25,000 in fiat daily.
Because the exchange accepts so many fiat currencies and serves several geographies, their team can translate any language and can verify government documents from around the world. While it does take a lot of time to get verified, with little communication from Kraken staff, this dedication to a global user base is impressive.
Depositing Funds to Kraken
Exchange users can deposit any Kraken-supported cryptocurrency to their exchange wallet using the blockchain. Users who have verified their personal identity can also deposit fiat money, and Kraken makes it easy to store fiat money on the exchange for greater access to the market.
Cryptocurrency: Depositing cryptocurrency is easy, but requires a little exploring on Kraken’s interface, which is a bit cluttered and illogical. To deposit crypto, one must find the ‘Funding’ tab and then select the correct cryptocurrency from the list. On Ethereum’s funding page for instance, you’ll then need to generate a deposit address.
Fiat: The same ‘Funding’ tab is used to deposit fiat money like yen, dollar, pounds, or euros. The fiat types supported are listed alphabetically alongside the cryptocurrencies, strangely, and when you select the relevant one, you’ll then choose your verified bank from the dropdown menu and specify the amount of the transfer. Withdrawing is the same process.
Execution and Fees on Kraken
We’ve reduced Kraken’s score in this category slightly due to its interface, which is nontraditional. Instead of drawing a distinction between users’ cryptocurrency wallets and their fiat wallets, both are found in the same place. Additionally, the ‘Trade’ tab is the only place where you can see your account balance, which is strange. Another example of the clunky dashboard is that one must select the correct counter currency (and there are a lot of them) before seeing any information relevant to them. Tradeable using USD, CAD, JPY, GBP, and EUR as a base, users can buy all the standard coins, and others like Stellar Lumens, Augur, Gnosis, EOS, Dash, and Iconomi.
The default interface is also without a chart, which must be launched in a separate window by clicking a somewhat nondescript button near the asset pair. Then, to place an order, you’ll need to use a very spartan form input system, which requires you only to input the amount of coin you’d like to buy, for what currency, and with a market or limit order. It’s difficult to reference the moving market at the same time. Overall, the Kraken interface is more a separate collection of functions rather than a platform with complementary features running in sync. The fees are favorable, though.
Deposit Crypto: N/A
Withdraw Crypto: ±0.0005BTC
Deposit Fiat by Wire: $0 – $10
Withdraw Fiat by Wire: Up to $60
Limit Order Fee: 0.00% – 0.16% depending on volume
Market Order Fee: 0.10% – 0.26% depending on volume
Kraken Exchange Security, Support and Compliance
In both security and compliance, Kraken is exemplary, though it has a lot of room to improve in the support department.
Security: Kraken is a very secure exchange, and employs some of the most sophisticated technology possible to keep its assets safe. All coins held by the exchange, including customer funds, are held offline in cold storage, and the exchange’s servers are protected by round-the-clock physical enforcement measures. The exchange itself is defended against breaches and denial of service attacks, and customers are required to protect their account with 2FA before gaining upper-tier access and deposit limits. One point against the exchange, though it’s no rarity, is that users are not in possession of their own private wallet keys.
Support: One area where Kraken has fallen short in the past, largely due to its popularity amidst the cryptocurrency boom, customer service can always be improved. Customers have reported very slow responses from service representatives, which is frustrating when they’re impatiently waiting for a slow transfer to confirm or their identity verification.
Compliance: One of the most impressive things in Kraken’s favor is its diligent efforts to remain compliant and fully transparent to customers as well. The exchange is regularly audited in its entirety, and is one of the only international exchanges to routinely pass the cryptographically-verified audit of its reserves. Additionally, based in the US, the exchange works closely with state and federal regulators, as well as multiple international entities and banks (such as Germany’s Fidor Bank) to comply with an evolving ruleset.
Kraken is a model for blockchain companies that aspire to reach multiple international markets and maintain quality of service. Though their handling of customer demand hasn’t been the most elegant, and their dashboard takes some getting used to, the exchange’s services are reliable and rarely experience downtime. At the end of the day, few are disappointed. Customers who want to build a cryptocurrency portfolio in a safe place, with access to many coins and the ability to store fiat funds will find few better exchanges than Kraken.