This review will cover the background of the company Kraken. It will measure if it is a secure cryptocurrency exchange platform. It will discuss the way this company has built its reputation among the leading five international cryptocurrency platforms.
According to their website, Kraken is the widest and most comprehensive Bitcoin exchange in terms of euro capacity and fluidity. Kraken was established by Jesse Powell in the year 2011. Jesse has a degree in Philosophy from California State University in Sacramento.
The company caters to users in the whole of North America, except New York. The company headquarters are located in San Francisco. It does not serve New York because of the BitLicense. When it comes to basic starting services in the company, anyone can use it. Examples of these may be price charts or statistics. It has become the second largest cryptocurrency platform in the word, last January 2017.
Investors such as Blockchain Capital, Money Partners Group, and Digital Currency Group were able to raise $6.5 million in capital ever since its three rounds of funding from various investors. In acquisition, it has also finished such as various crypto market visualization services including Bitcoin exchange Coinsetter, Cryptowatch, and Dutch exchange Clevercoin.
When Mt. Gox was declared bankrupt, representatives of the closure chose Kraken as the platform where claimants could apply to retrieve lost resources.
The Advantages of Using Kraken
- The platform is used widely by middle or crypto trading pro and random users
- It is ranked fifth on the list of best cryptocurrency exchanges
- They cater to a progressively wide range of cryptocurrencies along with fiat currencies
- It credits Bitcoin Cash and are now open for trading
- More affordable fees as compared to other exchanges for beginners like Blockchain.info or Bitpanda
- Kraken is very transparent and has become the first to give out proof in terms of reserves and auditing
- Offers free deposits for Canadian dollar, Euro, and Japanese yen
- Quick SEPA withdraws
- Affordable fees where fiat and cryptocurrency trades or withdrawals are less compared to other exchanges
- Excellent security where there is two-factor authentication
- Has margin trading for clients looking for better exposures with less upfront capital
The Disadvantages of Using Kraken
- Interface not as simple as other user-friendly exchanges such as Coinbase or CEX
- No difference in account verification times compared to competitors such as Bitcoin
- Can charge $15 fees for each fiat deposit and withdrawal made by international banks
- The closing of accounts has been reported when there is a suspicion of fraud
- Slow processing of orders, which can lead to loss of money for those trading professionally
- Customer Support not as effective as others
- Similar to other protective exchanges, Kraken has the private keys to the crypto address of your account
Available Services of Kraken
Clients can purchase and trade cryptos, including margin trade. Kraken currently supports fifteen crypto coins:
- Dash (DASH)
- Litecoin (LTC)
- Ripple (XRP)
- Stellar/Lumens (XLM)
- Bitcoin (XBT)
- Ethereum (ETH)
- Monero (XMR)
- Ethereum Classic (ETC)
- Zcash (ZEC)
- Dogecoin (XDG)
- Tether (USDT)
- Gnosis (GNO)
- Augur tokens (REP)
- Iconomi (ICN)
- Melon (MLN)
- EOS (EOS)
Kraken also supports fiat currencies. These consist of euros, Japanese yen, Canadian dollars, US dollars, and British pounds. SEPA, Swift, and bank wires are used to perform fiat deposits and withdrawals.
The deposit and withdrawal for US users cost $5. On the other hand, bank wire transfers not from the US cost €10, US$10 or £10.
For those in Canada, Canadian dollars (CAD) can be withdrawn through bank wire at no fees. Those members in the European Economic Area may use SEPA wire transfer to deposit and withdraw. For Japanese users, they can deposit and withdraw whichever sum below ¥5,000 through bank deposits without any charge.
The mobile application for the iPhone launched by Kraken in September 2014 was not received well. Although users compliment the smoothness of the mobile version of the company, they have issues with the app not working. It has a low rating of three (3) in the app store.
Since the interface of the website may be vague and puzzling, many beginners choose not to use Kraken. Nonetheless, users who are well versed in the industry don’t seem to have any complaints about the website platform.
Who are the people who use Kraken? When it comes to ranking, Kraken comes in after Coinbase, in website traffic measurement. This is based on similarweb.com. Yet, amongst the top five international cryptocurrency exchanges, Kraken has the highest percentage of mobile use at 38.46%. Every single one of the others obtain less than 27% of their traffic.
The Kraken website has an estimated 470,381 visitors daily, which happen to be impressive statistics. The majority come from the US amounting to 14.53%, France with 9.79%, Germany at 8.04%, the United Kingdom having 6.68% and the Netherlands at 5.52%. Desktop visits to this website consist 61.54% of the traffic, the remaining come from 38.46% are from mobile devices.
According to CoinMarketCap, Kraken is ranked between the fourth and sixth highest exchange.
Fees on Kraken
Compared to other major exchanges, Kraken has the lowest fees. Kraken only charges 0.09€ for a withdrawal of Euros, through SEPA bank transfer. That’s quite remarkable when compared to the large 10€ normal fee that business banking institutions ask from their clients. Kraken did well.
The fees typically vary from the account tier one has. The higher the tier and the volumes involved, the fewer fees you pay. These are measured as percentages of trade volumes. They vary between 0% and 0.26%. Kraken charges fees from the buyer and the seller. The buyer in a trade has to pay more than the seller.
The charges also depend on the currencies. When cryptocurrencies are paired, it earns fewer fees compared to one that trades fiat with cryptocurrency. Customers are also charged a fixed processing fee that is $60 per page for paper duplicates of transactions.
Kraken Account Creation
Creating an account on Kraken is just like making one on the usual online platforms. The company has included additional features on the page for signup for enhanced security in account creation. It also has a Know Your Customer (KYC), as well as, Anti-Money Laundering (AML) necessities from US controllers.
Step One: In signing up, you need to enter your email address and generate a password. The password must be at least eight characters including letters, numbers, along with special characters. The choice for PGP (Pretty Good Privacy) public key is also presented. This is for extra security when sending out emails.
You are also asked to come up with a master key, which adds a second layer of security to your account. It has a two-factor (2FA) login protection. This is particularly handy when altering passwords or changing devices. The master key may be a keyword, a Yubikey password, a Google authentication or public/private key pair. The master key is different from your other login identifications.
Step two: Activation of your account comes in second. You will get an email, which has an activation key that you then input into a second form. After accomplishing this, you can have access to your account. The method is smooth and easy too. It takes roughly about five to ten minutes.
Unlike Mt. Gox or Bitfinex, Kraken has never experienced a major security incident. However, in July 2016 many users have reported that their accounts have been hacked and their funds to be taken. In a later report by Kraken, they stated that most of the affected users were unable to use the two-factor login protection.
Even though Kraken gives their clients public addresses when depositing cryptos to accounts, they have the private keys to those addresses. If you plan on using this site to exchange cryptos, you need to trust them in making sure that your cryptos are protected.
Types of Accounts
Kraken has five levels or types of accounts when you sign up. After joining, you get a tier 0 account. The differentiation between the types is basically the maximums on fiat and cryptocurrency deposits and withdrawals monthly.
There are also various structures for fees in the different tiers. The advanced account tier, have lower fees charged per trade. It was discovered moving up to a higher level was quite easy.
In this tier, no fiat or crypto fund withdrawals or deposits are allowed. All you can do at this level is to view price statistics and trading charts. To get the services and overall experience of Kraken, you need to reach the tier 1 account.
In a tier 1 account, you can now withdraw and deposit cryptos. Limits on daily deposits are unlimited. But in making withdrawals, no more than $2,500 worth daily and $20,000 per month is allowed. Tier 1 also permits trading among different cryptocurrencies, but when it comes to cryptos and fiat currencies, it is still forbidden.
To get upgraded to tier one, your profile needs to be updated. Your full name, your date of birth, telephone number and country is needed. Three days may be needed for verification. It can take longer for those outside Europe, North America, and Japan.
In a tier 2 account, depositing fiat currency up to $2,000 daily and $10,000 a month is allowed. Also, there is a daily withdrawal limit of $2,000 in fiat and a $10,000 limit per month. The worth of cryptocurrencies that can be withdrawn rises from $2,500 daily to $5,000. The monthly maximums go from $20,000 to $50,000.
To be able to advance to tier 2, your postal ID is needed. Similar to tier 1, you may need to wait for a few days for it to be approved.
As for tier 3, it offers large volumes which are just enough for those taking trading seriously. For tier 3, there is a limit of $25,000 of fiat deposit per day and a $200,000 monthly limit. The maximum withdrawal for fiat currency rises to $25,000 and $200,000 per month. The total cryptos allowed to deposit per day also increases to $50,000 and $200,000 monthly.
A government-issued ID is needed to advance to tier 3. The presentation of a utility bill within three months is needed for the verification of residence as well. For those living in the US, a social security number is also needed.
A photo ID is also included as a confirmation. In doing this, you need to hold the ID you submitted for verification, along with a signed note with a date. The note should read: “Only for digital trading currency on Kraken”
The tier for is exclusively for business units or for persons trading at high amounts. The accounts in tier 4 allow up to $100,000 daily, in fiat currency and $500,000 per month. The limits in withdrawal for both fiat and cryptos are $100,000 per day and $500,000 per month. The customer support of Kraken needs to be contacted to request for a tier 4 account.
These are Kraken substitutes that seem parallel when it comes to effectiveness and reputation:
- Gdax.com – USA based high amount pro trading crypto exchange
- Bitfinex.com – Hong Kong-based prominent bitcoin exchange
- Poloniex.com – USA based second most popular and biggest crypto exchange. You can look at a review of Poloniex here.
- Bittrex.com – Passed Poloniex in terms of traffic received monthly. This is the biggest crypto exchange.