Kraken comprehensive review
Last Updated: 01 April 2018
Kraken is known to be one of the most liquid Bitcoin exchange by volume in Euro. The popular exchange was founded in 2011 by Jesse Powell. A brilliant man who has a bachelor's degree in philosophy form State of California.
The legend cryptocurrency exchange is based out of San Francisco, CA. It welcomes users from Europe and Japan as well as North America for the exception of New York state, due to BitLicense regulations. The Kraken website has its statistics as well as charts services available to folks around the globe. In January 2017, Kraken became the world’s second largest cryptocurrency exchange platform by volume. The company has gone through 3 rounds of funding and ultimately raised $6.5 million in capital from 13 different investors, like Blockchain capital and Money partners Group. Kraken has successfully completed 5 acquisitions, including Bitcoin exchange Coinsetter, Cryptowatch and Dutch Clevercoin.
Kraken: The advantages
Some of the advantages of trading with Kraken are:
- One of the most popular cryptocurrency exchange platforms for traders of all levels.
- Kraken is ranked 5th on the best cryptocurrency exchanges list.
- Kraken exchange offers many popular and liquid cryptocurrencies as well as fiat pairs for trading.
- Generous fee schedule in comparison with many other “beginner friendly exchanges” like Shapeshift.io.
- Kraken was one of the very first cryptocurrency exchange to pass the audit by providing proof of reserves.
- Absolutely no fees are being charged on CAD, JPY, EUR deposits.
- Exceptionally quick SEPA withdrawals. On average it doesn’t take more than a few days.
- Security features like 2FA via Google Authenticator are in place.
- Marginal trading is also supported.
Here is the list of some of the most noticeable disadvantages that I feel should be addressed.
- I would make adjustments to the user interface, its not made simple enough for begginers to get a grasp of the basic functionality.
- Verification process could be stretched to infinity. Many folks continue to make complains about long verification periods.
- Hefty fees on SWIFT transfers. (Up to $15 per transfer).
- Customers make claims about occasional account closures due to suspected fraud.
- Users continually report problems with order executions, as result the average time to execute an order to buy may take up to 30-45 minutes.
- Customer support lacks professionalism and responsibility. Numerous complaints were heard about Kraken’s customer support inability to meet customer’s requests. This is most likely because many companies outsource this type of labor by hiring incompetent folks in attempt to Save the budget.
- Kraken is known for holding private keys to your crypto addresses.
Interview of Kraken CEO
The interview with Kraken’s CEO Jesse Powell took place at the CoinSummit conference in 2015. There is a more recent version available here.
Services Available on Kraken
Kraken welcomes traders to buy / sell cryptocurrency on margin. Here is the list of 15 supported coins.
- Bitcoin (XBT)
- Augur tokens (REP)
- Iconomi (ICN)
- Zcash (ZEC)
- Dogecoin (XDG)
- Ethereum (ETH)
- Monero (XMR)
- Dash (DASH)
- Litecoin (LTC)
- Ripple (XRP)
- Gnosis (GNO)
- EOS (EOS)
- Stellar/Lumens (XLM)
- Ethereum Classic (ETC)
- Melon (MLN)
- Zcash (ZEC)
- Dogecoin (XDG)
- Tether (USDT)
- Gnosis (GNO)
- EOS (EOS)
Kraken supports fiat pairs like JPY, USD, CAD and British pound. Every fiat related transaction is made via SEPA, swift or direct bank transfer.
US residents can easily make an inexpensive bank wire transfers for $5. Residents of other parts of the world will be looking to spend around $10 for the same type of transaction. Residents of Canada are welcome to make deposits and withdrawals via SEPA for absolutely no cost. Unlike the Canadians, Japanese traders are limited to withdraw or deposit up to ¥5,000 at no cost.
A mobile app has been released in September 2014. Reports were made about various application bugs causing traders to lose profits. Its even poorly rated in the Apple store.
Kraken’s web interface is far from being optimized for beginners.
Who are Kraken’s Audience?
According to reports made by similarweb.com, Kraken’s popularity continues to grow, making it the second largest in terms of traffic. Among some of the top cryptocurrency exchanges, Kraken is known for attracting the largest mobile user base, around 38%. Others claim around 27% of mobile traffic.
Kraken has some very impressive stats
Kraken cryptocurrency exchange easily attracts around 470k daily visitors. Biggest chunk of visitors are coming from the United States (14%), 9% is coming from France, another 8% from Germany, 6% from UK and 5% from the NZ. Desktop traffic makes up of 61% while the mobile traffic is near 38%. CoinMarketCap places Kraken anywhere between the 4th and the 6th places on its volume list. Bithumb, OKCoin, Bitfinex, Bittrex, Poloniex are still ahead of Kraken in terms of volume.
Kraken’s Fees Schedule
As I had already mentioned, the Kraken’s fees structure is amazingly generous in comparison with many other leading cryptocurrency exchange platforms. For instance, when withdrawing EUR via SEPA transfer, Kraken applies a generous fee around 0.009€, opposed others charging at least 10€ on average. Furthermore, the fees vary according to selected tier. Higher tiers represent larger trading volume and of course lower fees schedule. The fees are calculated by taking the % off the traded volume. Percentage varies anywhere from 0% all the way to 0.26%. Unlike LocalBitcoins, a buyer and a seller both pay a trading fee. Sometimes the fee may depend upon the traded pair. Different fee structure applies to various pairs.
Creating a Kraken account
The account registration process is very straightforward, in fact its not any different from any other popular cryptocurrency exchange. As with many exchanges, several security features has been made available for account protection purposes. Kraken complies with AML requirements from the US cryptocurrency regulatory agencies, as well as promotes KYC - know your customer essentials.
First and foremost, the email address is essential for completing the registration process on Kraken.com. The platform advises to choose a strong password with at least 8 characters in length, including letters, numbers and special characters. Kraken offers a PGP - pretty good privacy option. An extra layer of security made for keeping a public key that is used for outgoing emails. An option for creating a master key is also available on Kraken. Its another layer of security containing 2FA protection feature. It comes in handy when changing passwords or switching devices. The primary key could either be a password, a Yibi code or a private/public key, a Google authenticator could also be used. A master key is advised to be stored in a separate location from your login codes.
After the successful registration, an new account needs to be activated. If you specified the correct email during the registration, an automatic email will be sent to you inbox. A body of the email would contain an activation key that would need to be copied and pasted into the form. Upon successful completion of this step, your account will be fully activated. Congratulations!
A complete registration is a relatively easy process that may take anywhere from 5 to 10 minutes. As of March 2018, unlike Mt. Gox, Kraken yet to experience any major security breaches. Nevertheless, reports were made about users getting their accounts compromised. In most cases, a user forgets to set up a 2FA protection, as result they become an easy target.
Just like many cryptocurrency exchanges, Kraken holds the private keys to the temporary public addresses it provides to users. When a 3rd party has access to your funds, there would always be some degree of uncertainty present.
Kraken: Account types
The popular cryptocurrency exchange platform presents 5 types of tiers. A brand new account is being automatically assigned to tier 0. As trading activities increases, the account begins to make its way up to higher tiers. Trading volume is directly related to tier level as well as the fee schedule. Making upgrade to higher tiers is fun and easy process.Tier 0
Accounts that fall under tier 0 are not allowed to make any deposits or withdrawals, regardless if its crypto or fiat. Not much can be done with tier zero accounts, except use it for informational and charts purposes.To be able to use some of the basic features and upgrade to tier 1 would be required.
Kraken: Tier 1
Tier 1 account holders are permitted to make deposits and withdraw cryptocurrency up to $2,500 daily or $20,000 monthly. This type of account lets its holders to make trades only between the crypto pairs. To qualify for tier 1, a user is required to register a full name, date of birth, phone number and country or residents update to their Kraken profile. The verification period takes anywhere from 1-3 business days.
Kraken: Tier 2
Tier 2 account comes with further privileges allowing its holders to deposit fiat currency of up to $2,000 daily or $10k monthly, as well as make withdrawals of up to $2k daily and $10k monthly. The crypto withdrawal limits are also increased from $2.5k daily to $5k daily and $20k monthly to $50k monthly. To be qualified for the tier 2, a correct postal address is required to be updated. The approval process may take up to several weeks.
Kraken: Tier 3
The multi tier verification structure was an excellent idea, especially for the advanced traders. Tier 3 accounts permits its users to make fiat deposit of up to $25k daily and up to $200k monthly. Thus, the withdrawal limits are also raised from $25k to $200k per month. The cryptocurrency deposits are now can be up to $200k per month. In order to qualify for tier 3, a government issued identification, as well as any utility bill that is clearly displaying and matching the address on file, would have to be promptly uploaded to the Kraken’s profile. Also, US residents would be required to provide a social security number. FInally, a selfie holding the same identification type as well as a handwritten statement clearly stating ” For trading digital currency on Kraken” would be required to be uploaded.
Kraken: Tier 4
The tier 4 is made for corporate clients as well as individuals trading high volumes. The type of accounts are given permission to make daily fiat deposits of up to $100k and up to $500k per month. Cryptocurrency withdrawals could be made up to $500k per month. To apply for tier for qualification, please contact the support.
A list of cryptocurrency exchange alternative options.
- Gdax.com – very liquid cryptocurrency exchange, designed for intermediate and professional traders. Check out my Gdax review.
- Bitfinex.com – among the most popular cryptocurrency exchanges, designed for any type of trader - based out of Hong Kong.
- Poloniex.com – second largest cryptocurrency exchange. Fiat deposits are not permitted. Based out of US.>/li>
- Bittrex.com – among the top three cryptocurrency exchanges.
Do you trade on Kraken? If so, please share your honest experience in the comments section below.