Kraken Exchange Review

/Kraken Exchange Review

Kraken Exchange Review 2018-05-22T15:27:18+00:00
Kraken Exchange Review

Kraken Review

Quick inner navigation:

  1. What is Kraken?
  2. Kraken Fees
  3. Kraken Verification
  4. Special Features
  5. Is Kraken Safe?
  6. How to use Kraken?

The introduction of cryptocurrencies had a transformative impact on the financial world and is about to greatly change the way of conducting the transactions. Bitcoins are increasingly becoming a household term and most conversations, nowadays, cannot be complete without its mention. Despite the strong criticism surrounding bitcoins and other forms of virtual currencies, the world of cryptocurrencies is growing, each day.

With the exponential growth of bitcoins and other digital currencies, another integral component of their trade comes to phase – digital exchange platforms. These are the sites that make it possible to buy and sell digital currencies for others or for fiat currencies by building a platform where users can interact with each other. One such platform is known as Kraken and one of the most significant processes is identifying the suitability of a platform for the handling of your transactions. For instance, the Kraken review presented here will help you identify the characteristics of this trading platform such as; is Kraken safe? What are the Kraken fees? Nature of Kraken trading and other aspects as discussed. Read on for more information on Kraken to help you make an informed decision.

What is Kraken?

Kraken is a US-based cryptocurrency exchange platform that has its operations based in the United States, Canada, and Japan. The platform advertises itself as the “world’s largest bitcoin exchange in euro volume and liquidity“. Kraken is a bitcoin exchange platform located in San Francisco, California in the United States. Kraken was founded on 28th of July 2011 by Jesse Powell. It is known to be the first bitcoin exchange to acquire a trading volume and price be displayed at the Bloomberg Terminal. The platform is currently owned by Payward Inc. and has managed to attract millions of people to invest in it. Cryptowatch, Glidera Inc., CleverCoin B.V and Canadian Virtual Exchange are subsidiaries of this digital exchange platform. The platform can be fairly termed as having a wide range of cryptocurrencies in which to deal in making it an easily appealing platform for international traders.

Designed to operate as an advanced cryptocurrency exchange, Kraken is the 21st largest crypto exchange based on 24-hour trading volumes on Coinmarketcap.com. Primarily, Kraken facilitates the exchange of cryptocurrencies like Bitcoins with Euros and US dollars. However, the exchange also supports more than 50 altcoins, all which can be traded against USD, EUR, BTC or Ethereum pairs.

As an advanced exchange, Kraken also allows leveraged trading, setting stop loss and limit orders and using an API to watch crypto markets in real time. Through leveraged or margin trading, traders get to speculate on cryptocurrencies using an advance issued by Kraken. For example, with 10 bitcoins in your Kraken account, you could get an advance of 50 bitcoins to trade with. This amplifies your profits but also risks losing all your bitcoins.

Buying and Selling Information

Kraken accepts fiat deposits through bank transfers. Japanese customers and Canadian customers have the privilege of depositing funds into their Kraken accounts using Canadian dollars and Japanese Yen respectively. European customers in the Eurozone can deposit funds for free of charge. U.S citizens and customers from around the world can also make deposits using US dollars.

Alternatively, Kraken customers can fund their accounts using Bitcoins, ethereum, ripple, litecoin, Bitcoin cash or tether (USDT). When funding your account with cryptocurrencies, you pay zero deposit fees except when depositing ether coins.

  • The platform has no limit for deposits.
  • Acceptable forms of making deposits are through bank transfers or the supported cryptocurrencies.
  • Payment options include; the US dollar (USD), the euro (EUR), Japanese yen (JPY), Canadian dollar (CAD) and British pound (GBP), bitcoins and the other supported cryptocurrencies.

Limitations

Kraken used to be a Europe-only cryptocurrency trading platform. Nowadays, the exchange is open to traders from all parts of the world. Still, not all traders are equal on Kraken. Fees are applied differently and Kraken’s verification systems limit traders who want to stay anonymous.

Without providing personal details like date of birth, phone number and contact address, you can’t deposit, trade or withdraw anything on the exchange. Canadian users also have daily limits for depositing funds on the exchange. They can only deposit a maximum of $25,000 CAD per day. Japanese traders can only deposit 5000 yen or higher.

Withdrawal amounts are fixed according to the level/tier that a user is in:

  • Tier 1 – dealing only in cryptocurrencies and has withdrawals of 2,500 as a daily limit and $20,000 in a month.
  • Tier 2 – for fiat currencies limits of $2,000 daily and $10,000 monthly. While cryptocurrencies have a daily limit of $5,000 and a monthly limit of $50,000.
  • Tier 3 – limits on deposit of fiat currencies and withdrawals with daily and monthly limits of $25,000 and $200,000 respectively.

Available cryptocurrencies include:

Bitcoin (XBT), Ethereum (ETH), Monero (XMR), Dash (DASH), Litecoin (LTC), Ripple (XRP), Stellar (XLM), Ethereum classic (ETC), Augur (REP), Iconomi (ICN), Melon(MLN), Zcash (ZEC), XDG, Tether (USDT), Gnosis(GNO)

As evidenced, Kraken avails you a wide range of cryptocurrencies to deal in plus a lot of cryptocurrency and fiat pairs.

Kraken Fees

Kraken’s deposit, trading and withdrawal fees vary on a per trade and region basis. Funding your Kraken account costs you nothing if you use bitcoins, ripple, Litecoin, bitcoin Cash or Tether. Funding an account using ethereum has a small fee. All bank deposits using SEPA are free of charge. Canadian and Japanese bank deposits are also free of charge, but Japanese customers can only deposit 5,000 yen and above. American Kraken customers pay $5 to deposit while non-American users pay $10 as deposit fees. For withdrawals, European customers pay €0.09 while non-American customers pay as high as $60 per withdrawal. Withdrawing using Bitcoin costs 0.001 bitcoins while ethereum cost 0.005 ether coins.

Trading fees on Kraken are generally low. The highest amount of trading fee on the exchange is 0.16% maker fee and 0.26% taker fee for trades of $50,000 or less. The lowest amounts of trading fees are 0% maker fee and 0.1% taker fee for trade volumes of above $10 million.

This section contains the fee schedules, leverage and margin information regarding the currency pairs provided for on the Kraken website.

  • Just like the buying and selling amounts, the fees are tier-based.
  • It follows that the more voluminous the trading transactions are for a user, the fees charged on subsequent trades are lower.

Therefore, the fee considerations include:

  1. Fees are charged with every trade
  2. The fees are calculated in percentages of the particular trade’s volume measured using currency. This is taken by default.
  3. The user fee volume is arrived at by measuring how it compares with the equal amount listed in the Fee Volume Currency standings at the time the trade tool place.
  4. The volume levels of the trading transactions are measured and only applicable for trade that occurs within 30 days.
  5. Additional fees include; $60 per page for copies of communication.

Fiat withdrawal fees are as follows:

  • EUR SEPA withdrawal – costs only €0.09 in the EEA countries.
  • GPB wire transfer via PayCash– 0.19% with a retainer minimum fee of £10
  • USD PayCash SEPA– traders from EAA countries charged 0.19% with a $15 minimum retainer fee.
  • USD SWIFT Withdrawal– A 0.19% charge on the other countries with a minimum retainer of $15.
  • USD SynapsePay– available in thirty-seven states in the United States including DC, has a flat rate charge of $5.
  • CAD EFT withdrawal– available in Canada only and charges a flat fee of $10 CAD
  • JPY Domestic Withdrawal– only for Japan and charges a flat fee of ¥300

The charges on cryptocurrencies are even much lower than those of fiat currencies:

  • Majority of the deposits on Kraken are not charged any fees but wire transfers are often charged a fee of €5 in the EU countries and 0.19% for the GBP and USD deposits with a retainer of £10 and $20 respectively.
  • All the cryptocurrency deposits are free of charge with the exception of Ripple which attracts a charge of 50 XRP.
  • Both the maker and taker are charged trading fees which start at 0.26% for the taker and 0.16% for the maker.

Kraken Verification

Different traders access different services through a tier system. When you open an account, for example, you can’t deposit or trade anything until you undergo a verification process.

In the first tier of verification, users provide their dates of birth details, countries of origin and phone numbers. Through the simple verification, they are then allowed to fund their accounts using cryptocurrencies and make trades with any pairs on Kraken. In the second tier, you provide your physical address and you are allowed to deposit using fiat currencies.

However, users from certain countries where KYC rules are emphasized must produce proof of residence and government-issued IDs to make deposits. Know your Customer (KYC) procedures help the exchange ensure you won’t misuse its services by laundering money. To get verified, you are required to provide crucial information like proof of residence; recent utility receipts, a government-issued ID, personal picture, and addresses.

The final tier of verification allows corporate traders to access Kraken services. Verification on the final tier is completed after filling anti-money laundering documents. Like verifying a personal account, the concerned company must fill KYC documents for top company employees, the company’s license and taxation details.

  • The verification process is usually a straightforward and simple process but the Kraken platform becomes a little stricter with higher tier verifications.
  • There are four levels/ tiers on this platform with regards to verification.
  • The first two tiers are basic and take very short periods of time unless there is a need for a manual review of the application. Tier 3 requires a few days to complete.
  • The platform does not allow deposits or withdrawals or any trading activities prior to verification hence it is advisable to do the verification.

Tier 1 verification required you to provide:

  1. Your full name
  2. Date of birth
  3. Your country of residence
  4. Mobile number verification

Tier 2 verification only requires the address of the user. In this level, deposits, withdrawals, and digital currencies are made available.

Tier 3: deposits and withdrawals of fiat currencies are made available and limits of funding are higher than those in tier 1 and 2. This level also allows for margin trading. The verification at this tier requires;

  1. A valid government identification document
  2. A recent proof of your residence
  3. It is necessary to have tier 3 verification especially in the United States, Canada, Germany, Japan and all the other countries that are dependent on the type of currency.

Tier 4: this level offers both corporate and individual accounts. For an individual account, verification requires the submission of KYC documents and an application form signed by the applicant.

Verification of the corporate account requires a user to contact support.

Special Features

Kraken has got lots of features you won’t find in many cryptocurrency exchanges. To start with, the bitcoin exchange allows fiat deposit using 4 different world currencies and 6 different cryptocurrencies. It provides leverage trading and setting of profit and stops loss limits. Kraken’s fees are also structured to favor loyal traders. If you trade more than $50,000 on the exchange, the fees are lowered until 0% by the time you make trades higher than $10 million.

Additional special features on the exchange include Cryptowatch, a service that allows you to watch over 700 markets in real time. Not many exchanges offer as many trading pairs as Kraken. The exchange allows trading different cryptocurrencies with euros, US dollars, bitcoin, and ethereum.

Is Kraken Safe?

Kraken used to be one of the best-rated exchanges in the world, but not anymore.  However, it’s worth noting that Kraken suffered a Denial of Service (DDoS) attack last year after malicious attackers bombarded the exchange with such a high number of complaints that it couldn’t handle customer services efficiently.

  • Community Trust

General ratings indicate that the platform has managed to maintain a great community trust. The opinion of the public concerning this platform is generally varied with the good and bad alike. Positive reviews credit the platforms for having a smooth experience during trading transactions. Also, being an international system, it is appealing to many international traders. Negative feedback revolves around the customer service although this may be people who simply had a negative experience with the platform. The result of the DDoS attack was that Kraken got numerous negative reviews on bitcoin forums and review websites. Since the attack, however, Kraken has been trying to improve their services. In recent months, the trading website has been receiving both positive and negative reviews. Overall, the exchange seems to be working on their reputation which is still low.

  • Security

In this platform, the databases that contain sensitive data of their users cannot be accessed from the website and cannot be decrypted without having access to the systems put in place that are highly secured. The platform has put in place some stringent measures to ensure security such as The 2-factor-authentication system for account logins; PGP email encryption system. It is also recommended that users take personal initiative to add a global settings lock to their accounts.

Like most modern websites, Kraken is secured with HTTPS protocol. In addition, Kraken stores nearly all of the customers’ digital assets in cold and semi-cold wallets. The exchange claims that all of their wallets are encrypted and cold wallets are isolated using air-gap technology. The servers used to keep the exchange operational are locked in a private cage and guarded on a 24/7 basis. Data on Kraken’s servers is replicated and backed daily. In recent months, the exchange has improved their anti-DDoS attack mechanism. They currently partner with Cloudflare and other services to ensure user’s data is encrypted and protected with the latest technology. Additional security measured applied by Kraken include saving customers’ fiat money in separate bank accounts from their own and having reserves to ensure a bank going bankrupt would never affect their business.

  • Customer Support

The Kraken platform has a 24/7 support system with instantaneous chat and email responses to user queries. Despite the lack of serious complaints, a few complaints have been launched on the delay of reaction to support. The support system may sometimes take a couple of days before responding and this is probably the reason it is not highly rated.

Kraken’s customer support or the lack of it has really deteriorated in the last few months. The bitcoin exchange does not offer phone services and only reply to customers who complain through a ticket system. However, most customers claim that Kraken can tend to ignore the requests and only reply after 48 hours or longer. However, some customers also praise Kraken’s customer services. Those who appreciate them note that Kraken has a supportive customer team that has been working hard to restore the exchange’s tainted reputation after numerous DDoS attacks in 2017.

  • Handling Speed

Kraken advanced their trading engine in late January and helped improve their handling speed. Cryptos to crypto trades are completed almost instantly. However, trades made with fiat currencies can take a while as the funds move from one bank to the other. Still, the exchange is far from satisfying more customers. Reviewers on bitcoin forums note that the trading engine has bugs which slow trading speeds. Claims indicate that the system is currently overwhelmed, several processes such as verification take very long and support responses can take a couple of days.

How to use Kraken?

  • Step 1: Create an Account

Visit Kraken’s website and navigate to the sign-up tab. You will be asked for a genuine email address, a username and a password with at least 8 characters. Login to your email address and use the activation key emailed by Kraken to activate your account. Log in to your new Kraken Account.

  • Step 2: Get Verified

As already mentioned, you can’t do anything on Kraken without proper verification. Click the ‘Get Verified’ icon and provide your phone number and the personal details requested. By providing your name, date of birth and government issued ID; you can make a deposit and start trading.

  • Step 3: Fund your Account

After verifying your account, enable 2-factor authentication to secure your account. Provide your bank information and confirm a trade on the amount you are comfortable with. Alternatively, fund your account using bitcoins, ethereum, ripple or other accepted cryptocurrencies. It’s easier and requires less verification.

  • Step 4: Make a Trade

With funds in your account, it’s time to buy bitcoins or alternative coins. Head on to the ‘New order’ icon and select the cryptocurrency you want to trade. Enter the quantity you wish to buy and select a limit order or a market order. This way, you get to trade coins at the prices you are most comfortable with.

  • Margin Trading

Trading with leverage (margin trading) requires a lot of experience in trading. The feature is, however, easy to access on Kraken on ‘Positions’ icon. Make sure you learn more about margin trading before using the future to avoid losing all of your funds.

  • Cryptowatch

This service is offered as a web-page with charts and details about more than 700 cryptocurrencies. It’s an excellent tool for traders which gives you information about the markets in real-time. If you want to access cryptowatch, it’s available under their trading guide (help) icon.

  • Step 5: Withdraw

If you want to withdraw some of your digital assets, sell them in the ‘New Order’ icon. Your bitcoins or fiat money will be deposited on an exchange-provided wallet. Access it and withdraw them into a personal wallet or bank account.

Kraken Review summary

The Kraken platform has been present in the world of cryptocurrencies since 2011. All this while the exchange site has tried to make a name for itself in the world of digital currencies and currently tops the preferences of international traders. Despite the kinks and patches that are evident from the reviews of some users, the platform remains to consistently deliver high value to its traders both in the United States and globally. The platform is relatively safe and has lower costs in comparison to competing exchange platforms. Regarding, the ease of use, traders require little guidelines from which they can learn easily how to execute all tasks on this platform.

Kraken is one of the largest exchanges in the world. The exchange attracts hundreds of thousands of traders to trade nearly $290 million every day. With their fee structure that rewards high-volume traders, Kraken is a great exchange for day traders and traders who deal with huge volumes of money. If you consider yourself a high-roller and can trade more than $50,000, you will love the exchange’s low fees and high-performance trading engine. Additionally, the exchange lists a lot of altcoins and many trading pairs. Traders who live in Europe, the US, Canada and Japan also enjoy free or extremely low withdrawal fees. For first time traders who want to trade less than $500, however, you won’t love Kraken. They have withdrawal fees of $60 for non-US traders, which is limiting. Overall, Kraken is a great trading platform with lots of features that favor the experienced, loyal trader.

Pros

  • Charges relatively low fees
  • Has excellent liquidity especially in EUR markets
  • Supports margin-trading
  • It is the only platform that is selected to support the investigative proceedings towards Mt. Gox’s stolen Bitcoins

Cons

  • Mobile platforms are not efficiently supported
  • Suffers from uptime problems when market conditions get hot
  • Verification can take very long, support is very slow and crappy
  • In BTC/USB a trader can experience volume lags.

Thank you kindly for reading this review. Please make sure to check out our site for more info regarding the crypto world.

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