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Kraken

Kraken

4.3 out of 5

Founded in 2011 and focused on experienced traders, US-based Kraken is the largest crypto exchange when it comes to trading in euros. It’s also one of the most secure, given the comprehensive range of safety measures the exchange takes, such as keeping the vast majority of user funds in offline wallets. Another big plus is that its fees are among the lowest in the industry, with free deposits and very competitive withdrawals and trades. Yet despite these advantages, its support team can take long to respond to queries, with some customers waiting weeks for help.

Pros

  • Low fees
  • Strong security measures
  • Allows trades in cryptocurrencies and fiat currencies

Cons

  • Complicated user interface
  • No credit/debit card deposits and withdrawals
  • Customer support isn’t all that supportive

Screenshots

Fees

Low fees are one of Kraken’s biggest attractions. Trading/exchange fees for “takers” (those who take an existing order on Kraken’s order book) vary with the cryptocurrencies being traded and the volume a user has traded in the previous 30 days. However, they generally range from 0.1% to 0.35% for most paired currencies. Newer or less popular currencies can see taker trading fees as high as 0.75%.

As for “makers” (those who trade by creating an order on Kraken’s order book), their trading fees tend to be lower than those for takers, since they add liquidity to the market. Once again, they vary with the volume of trades and the currencies being traded, but they generally start at 0.16% and go as low as 0% for trades worth more than $10 million.

With deposits, these are free for the vast majority of cryptocurrencies. For some newer or less common currencies, such as melonport, gnosis, and EOS, there are deposit and/or wallet setup fees. Melonport has a 0.01 M address setup fee, for example, while EOS has a 0.2 £ deposit fee and a 0.2 £ wallet fee.

On the other hand, all withdrawals incur a fee with Kraken. As the sample table below illustrates, they aren’t quite the cheapest for bitcoin withdrawals, but they do well with other currencies, being the cheapest for ethereum and dash, for instance.

CurrencyKraken withdrawalBittrex withdrawalPoloniex withdrawalBitfinex withdrawal
Bitcoin (BTC)0.001 BTC0.001 BTC0.0005 BTC0.0008 BTC
Ethereum (ETH)0.005 ETH0.02 ETH0.01 ETH0.01 ETH
Litecoin0.002 LTC0.01 LTC0.001 LTC0.001 LTC
Monero0.05 XMR0.04 XMR0.015 XMR0.04 XMR
Dash0.005 DASH0.01 DASH0.01 DASH0.01 DASH

They also charge for withdrawing fiat currencies, with a SEPA withdrawal of euros costing only €0.09. Compared to Bitfinex, for example, this is cheap, since Bitfinex charge 0.1% for withdrawals. In the case of a €1,000 withdrawal, this would mean the user would have to pay €1 to Bitfinex and €0.09 to Kraken.

Background

Based in San Francisco, Kraken has the distinction of being the exchange chosen by the Tokyo District Court to handle customer compensation claims related to the collapse of Mt. Gox in 2014. It also offers an exhaustive range of different trade types, from the usual limit orders and stop loss orders to margin trading. Focused more on the seasoned trader, it enables trades not only between cryptocurrency pairs, but also between fiat currencies (e.g. pounds, euros) and cryptocurrencies. However, at the moment, it doesn’t offer trades in as many cryptocurrencies as certain rivals, being limited to only 17 digital currencies at the time of writing.

Given that it caters to professional traders and companies, it’s generally a very secure exchange, offering four tiers of account verification that enable users to trade increasingly large amounts. And rounding off its status as a great all-rounder, its trading and deposit/withdrawal fees are very competitive. The only significant mark against its name, however, is its customer support, which due to a large backlog of queries can take several weeks to answer customers.

Security

Kraken takes security very seriously. Its platform has gone down only once – in January 2018 – since it launched in 2011, and even then this was to perform necessary system upgrades. And aside from this upgrade, it takes a wide range of measures to lower the risks of coins being stolen through its system, including the following:

Transferring new deposits directly to offline ‘cold’ wallets, which are physically isolated from any online system
Storing the vast bulk of coins in cold wallets, with only the coins required to maintain Kraken’s liquidity being kept in online ‘hot’ wallets
Storing a small number of coins in semi-cold wallets, which are kept on defended machines with locked drives
Encrypting all wallets

These measures guard Kraken’s platform itself from being compromised by hackers, yet the exchange also has the following features in place to protect individual accounts:

  • Two-factor authentication, which can be used for logins, trades, funding, and for actions performed using Kraken’s API
  • Info-leakage protection: (opportunistic) login and password recovery attempts won’t reveal any account info, or even the existence of an account
  • PGP/GPG encryption for emails
  • User verification documents are uploaded to an isolated, highly secure system
  • All sensitive user data is encrypted and can be decrypted only by accessing several secure systems
  • Global settings lock, which can be activated to prevent changing of user account info (e.g. withdrawal address) by a third party who’s hacked into an account

And if the above weren’t enough, Kraken also takes a number of measures to guarantee its legal compliance, system security, and financial security. These include the maintenance of full currency reserves and the daily backing up of data, all of which combine to significantly lower the risk of users losing money.

Usability

While it offers a wealth of trading options, usability isn’t Kraken’s strongest point. As opposed to having all the necessary info and boxes on a single dashboard, its interface is divided among a number of separate tabs and windows. This forces the user to click from one place to another whenever they want to place an order, then see their orders, and then see their account overview, for instance. To be honest, this isn’t a fatal flaw, and users will get familiar with it soon enough, but it does make the Kraken experience a bit less seamless when compared to some of its slicker rivals (e.g. Bitfinex, Bittrex).

Despite the decentralized nature of its interface, and despite the lack of a mobile app, Kraken offers a wide range of trade types and even margin trading. This makes it a powerful resource for trading cryptocurrency and for getting the maximum possible value from funds. The following advanced trades are available:

  • Stop Loss
  • Take Profit
  • Stop Loss, Take Profit
  • Stop Loss, Take Profit Limit
  • Stop Loss Limit
  • Take Profit Limit
  • Trailing Stop
  • Trailing Stop Limit
  • Stop, Limit

These come in addition to basic market orders, limit orders, and margin/leveraged trading. That said, at the time of writing Kraken has suspended advanced order types for a variety of fiat currency-cryptocurrency pairs, including EOS/EUR, EOS/USD, XLM/EUR, XLM/USD, GNO/EUR, GNO/USD.

Deposit/Withdrawal Methods

Another slight weakness compared to more beginner-friendly exchanges such as Coinbase is that Kraken doesn’t allow debit/credit card deposits and withdrawals. Nonetheless, the advantage of this is that the exchange can keep its fees lower than its competitors, while it still provides a number of options for completing bank transfers. For customers wanting to deposit euros, there are three ways of doing this:

  • Fidor Bank AG SEPA
  • Fidor Bank AG Wire Transfer and
  • SMBC (SWIFT)

With withdrawals, the same options apply, with SEPA once again providing the fastest transactions. However, it’s worth noting that deposits and withdrawals in euros are available to users with at least Tier 2 verification, except in Germany (and Japan), where Tier 3 verification is required. If users aren’t verified up to level two, they’ll have to transfer cryptocurrency from and to an external crypto wallet.