Operated by Payward Inc., Kraken is a cryptocurrency exchange which not under any direct regulation from any government or private agency. Kraken houses a maximum of its coins in cold storage and only keeps a handful of the same for the regular trading course.
Kraken located in San Francisco, California (United States)
Kraken is one of the most respected and established a crypto trading platform in the United States. The exchange claims to be the biggest exchange in the world when we talk about Euro volume as well as liquidity. The crypto platform operates across the United States, Canada, Japan as well as the European Union. One should note that New York is an exception for trading at Kraken. If you’re a crypto enthusiast, you can purchase famous cryptos like Litecoin (LTC), Ethereum (ETH), Bitcoin (BTC), EOS, Dash, Ripple (XRP), Monero (XMR), Zcash (ZEC), Gnosis (GNO), Dogecoin (DOGE) as well as other cryptocurrencies. One can also get your hands on fiat currencies like the US dollar, Euros as well as Japanese Yen. What comes as an important fact is that unlike other crypto exchanges, one can do margin trading on Kraken. This is a great news for experienced traders.
History on Kraken
In the year 2011, the founder of Kraken had visited the office of Mt. Gox which was at that time one of the biggest exchange for crypto trading. Jesse Powell is the founder of the Kraken when he was at Mt. Gox, he was stunned how Mt. Gox was hacked and was brought to ground in no time. The reasons were clear to him, Mt. Gox was poorly run and lack of verified accounts, less compliance with laws made customers lose their money. Now, the founder decided to establish a crypto trading platform which was not only safe but more fast and convenient. Moving ahead, Kraken became an established crypto trading exchange in the fiscal year 2014 and during the same time Mt. Gox was hacked again and the losses were in $460 million USD. It was then Jesse further understood that customer trust is necessary to run the crypto trading platform. Kraken the established dedicated links with banks of Japan as well as Germany. Kraken was the first ever crypto trading platform which was listed on the Bloomberg Terminal. If you don’t know what that is, Bloomberg terminal is more like a tool which is currently used by banks and financial institutions around the world.
Kraken garnered the trust of the customers. However, in the fiscal year 2018, there were problems reported at Kraken. The crypto trading platform closed the trades for over seven days in lieu of implementing the updates. However, Kraken has maintained a solid reputation till date and was never being subjected to any major hack. One should also know that Kraken was picked up as the platform which was responsible for transferring claims to the ill-fated customers of Mt. Gox. When the hacks at Mt. Gox occurred, the company went on filing for bankruptcy, it was then Kraken was chosen as a reliable partner for the purpose of facilitating the payments. What makes Kraken unique is the fact that Kraken is one of the very few crypto exchanges which offers trading Bitcoin against the fiat currencies like CAD & GBP. Thus, liquidity is not an issue for Kraken unlike other big players in the market.
Talking about one of the most intuitive features at Kraken, leverage trading is available and it varies from 1:2 to 1:5. It can be said that if you’re a forex trader, you might see the ratio very small. Further moving the transaction fees stated by Kraken on leverage trade, a user is liable to pay a variable 0.01% to 0.02% based on the type of instrument used and the fees is applied once in every four hours. Talking about the fees kept for markers and traders, Kraken charges a different sum from both the categories. If you’re a maker, you are required to pay 0.16% on your every trade & if you’re a taker, a user is required to shell-out 0.26% on every respective trade. If you’re confused with the terms makers and traders, let’s know about it. The taker fee is the bigger fee which is a type of aggressive entry in which a particular instrument is directly bought at the lowest available ask price. In taker fee, a user takes away the liquidity of the market. On the other hand, a user can also place his/her own bid in the order book. The same is then triggered by a different trader who might be willing to lend his asset to you. In this fashion, the original user providers market with liquidity and ends-up paying a lower fee, which is the maker fee.
The Chief Executive Officer and co-founder of Kraken is Jesse Powell. He is a crypto evangelist and has over 15 years of experience in virtual goods and investment domains. Jesse is also working on an open-source Gmail script called the “Elephant Grass”. The script is being developed for the purpose of gaining control over Gmail Bitcoin-powered spams.
How to trade on Kraken?
Before knowing how to start trading on Kraken, let’s first know about the payment methods which can be used to fund your account. Kraken is accepting both, cryptocurrency and fiat currency as payments to fund accounts. One can easily fund their Kraken account by simply logging into the funding section in My Account and then clicking on the deposit button.
If you’re looking forward to making a wire transfer, you should note that the service is only available for users who hold a tier 3 or tier 4 security clearance by Kraken. You can know more about the KYC process by referring to the below section. When you have a verified and running Kraken account, you can access the trade interface by simply referring to Trade section in your account and then clicking on the Cryptowatch in New Order.
If you wish to enter an order, you’re required to fill the order form which can be accessed on the top-right corner of the screen. If you’re looking forward to viewing your old orders, positions or trades of any kind, you can simply stroll over to the lower screen and can view the same. There comes a time when you’re required to select the currency pair, this can be achieved by selecting the Currency pair option on the upper left portion of the screen, just below the Kraken’s logo.
Deposits can be made under the Funding section which is available under the Menu tab. If a user wishes to make a trade, they can simply click on the Trade tab in the Menu and further stroll over to New Order option. Then, you’ll be required to enter details such as quantity, preferred payment currency and more, then click on confirm.
There is an official mobile application available by Kraken for iOS users. The app was launched in the fiscal year 2014 and since then, it’s enabling easier trades and news access to users. The interface is state of the art. You can simply enter your Kraken API for the purpose of viewing your balance and running orders. Market data can also be accessed on the application. Functions like, pair selection, trade execution and more can also be done through Kraken official iOS application.
Create an account on Kraken
Setting up a dedicated Kraken trading account is easy. One should also know that Kraken has featured extra features on the sign-up page itself for the purpose of securing the user account and protecting the data. Kraken complies fully with Know Your Customer as well as Anti-Money Laundering guidelines stated by the US regulators. After you visit the Kraken website, the first step is to provide your email id and create a password. One can even enable the option to share a PGP public key which can be used by Kraken for additional protection of your account.
PGP is pretty good privacy and is used by Kraken while they are sending you any emails. Further, you’re prompted to establish a master key and this provides another level of security to your account. The second step during the account setup is to verify your email address. Kraken will mail you a link as soon as you sign-up with them. Upon a successful email verification, your account will be available for an access and you’ll be provided with tier 0 security status. Signing up at Kraken can take anywhere from 5 to 10 minutes.
There are several tiers available for accounts at Kraken. Tier 0 is the default tier which is obtained as soon as you confirm your email address with Kraken. A user at this level can move around the platform and can experience the interface. But, you can’t make any deposit or withdrawal at this level of security. Further moving, Kraken only asks for basic detail about a user while he/she is setting up a tier 1 or tier 2 account type. For tier one verification, you’re required to provide details such as full name, country of origin, date of birth and even your contact details. After this, a user can deposit and withdraw only digital currency at Kraken. Tier 2 provides exclusive features and enables a user to start trading in digital currency.
Also, depending upon your country, you might be eligible for fiat currency funding as well. This level of security is achieved when you submit the address proof. The tier 3 level of security involves higher funding limits. If you’re an experienced trader and are looking forward to higher limits than tier 2, then you can simply upload your identity proof as well as address proof. The last and highest level of security account is tier 4, best suited for corporate trader or individuals with high-volume, the privileges can be granted by simply signing up a physical application form to Kraken as well as supported KYC documents.
Kraken is known best for the array of security procedures deployed. The crypto is stored in cold storage wallets which are further air-gapped. In simpler terms, the funds are kept in the type of wallets which are not connected to the internet and are further kept at a physically secured location. Commenting on the system security, Kraken makes use of locked servers as well as the locked racks which are further protected by armed guards. The data on the system is encrypted on a regular basis. Kraken also keeps their internal network and client upload data separated. This, in turn, means that people working at Kraken can only access your account for the purpose of account verification and customer support, nothing else. One should note that Kraken keeps extensive reserves in the bank accounts for the purpose of catering against the liquidity shortfalls in the fiat currency which might happen.
Conclusion on Kraken’s review
Offering around the clock customer support backed by extensive support guide, Kraken also offer technical assistance through support tickets. Apart from that, the security measures are rigorous and are meant to keep the accounts secured at any cost. The user interface is pretty intuitive and the trading process is simple as well. Thus, for beginners as well as the experienced crypto enthusiasts, Kraken can be an out of the box pick for them. The applicable fees for regular as well as leverage trading are pretty reasonable as well.