Is Kraken Regulated? Kraken Regulation | Kraken Review

Is Kraken Regulated? Kraken Licensing and Regulation

“Kraken is not under direct regulation by any authority or agency, but this is not considered unusual in the cryptocurrency market.”

Launched in 2011, Kraken Digital Asset Exchange is one of the oldest and largest bitcoin exchanges in the world and boasts the widest selection of national currencies and digital assets. Kraken trading platform has its headquarters in San Francisco, but has offices all around the globe. It has been consistently rated the most secure and best digital asset exchange by independent news media. It is the first exchange that displayed its market data on the Bloomberg Terminal and also the first to give people access to leveraged margin trading. Kraken was also the first exchange of its kind to pass a cryptographically verifiable proof-of-reserves audit.

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It has gained the trust of hundreds of thousands of institutions, traders and authorities, which includes Fidor Bank, regulated by Germany’s BaFin. Some of the top investors in Kraken include Digital Currency Group, Hummingbird Ventures, Blockchain Capital, SBI Investment and Money Partners Group. Operated by Payward Inc., Kraken is not under direct regulation by any authority or agency, but this is not considered unusual in the cryptocurrency market.

Safety and Security

One thing that this digital asset exchange can be proud of is the fact that they have not suffered from any hack to this day. There have been numerous exchanges that have been subjected to breaches, but Kraken’s security measures have stood up to any attempts made and this is very impressive. It is definitely not a small feat, but how have they managed it? For one, Kraken relies cold storage wallets and these are well ‘air gapped’. This means that the funds are kept in wallet that doesn’t connect to the internet and is in a secure location.

As far as system security is concerned, Kraken uses data centers that are protected by armed guards and have locked servers in locked racks. All the data stored on the system is updated and encrypted on a regular basis. The internal network is also kept separate from the client data, which prevents staff from accessing client information for anything other than verification. The exchange also wants to protect against potential liquidity shortfalls in Fiat currency so they maintain extensive reserves in their bank accounts.

In regard to users, two-factor authentication is used by the digital exchange for account access. They can keep your account safe in the event someone else is able to access your password. A global settings lock can also be placed on your account as this prevents the display of any confidential or sensitive information and prevents any changes in the account for a specific period of time. The standard SSL certificates are also used by Kraken to protect from phishing attacks. Also, the exchange offers PGP encryption for your email communications. This refers to Pretty Good Privacy and eliminates the chance of any emails getting intercepted by cyber-criminals and hackers.

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Assets and Countries

Kraken is one of the few exchanges that serve as ‘Fiat Gateways’. This means that the exchange can be used by people for buying and selling bitcoin in exchange for a Fiat currency. Currently, Kraken offers trading in a number of countries with various Fiat currencies. Residents of Canada, Europe and the US can use the exchange and deposits can be made in British Pounds, Euros, Canadian and US Dollars. Japanese Yen payments were also accepted before, but this option was eliminated due to banking regulations.

One of the most impressive features of Kraken, as compared to some other larger cryptocurrency exchanges, is the range of cryptocurrency pairs they have to offer. You can find XBT/USD, XBT/EUR, ETH/XBT, DASH, LTC, ICN, REP, ZEC, XRP, XMR, XLM, XDG, GNO, ETC, BCH, MLN and EOS amongst others. This is considerably more extensive than Kraken’s competitors such as Bitstamp, Coinbase and more. In case of Fiat crosses, there are over 47 market pairs available.


Your profitability in regard to trading is directly affected by the fee imposed by the exchange.

Thus, there is no doubt that this is one of the most important things to consider when you are looking at an exchange. The fee that is charged for depositing and withdrawing from your account on Kraken are outlined below:

  • A cost of $5 is charged for USD wire deposit and withdrawal for banks in the US.
    A $10 charge for deposit and $60 charge for withdrawal is applicable for USD wire for banks outside.
  • There is no deposit charge for when EUR SEPA Deposit is used and withdrawal costs are €0.09.
  • There is a €10 deposit charge for outside EUR deposit.
  • There is no charge for CAD wire deposits, but $10 CAD is applicable in the case of withdrawals.

Depositing cryptocurrency on Kraken doesn’t incur any charge, but some withdrawal costs are applicable in the case of the top 7 cryptocurrency pairs:

  • Bitcoin: 0.001 BTC
  • Bitcoin Cash: 0.001 BTC
  • Ether: 0.005 ETH
  • Litecoin: 0.02 LTC
  • Ripple: 0.02 XRP
  • Monero: 0.05 XMR
  • Stellar: 0.00002 XLM

In regard to trading fees, the amount charged by Kraken depends on the amount of trading volume that you are completing and also whether you are a ‘taker’ or ‘maker’. This refers to whether you are buying or selling the pair. These can vary for every currency pair and fiat cross are extremely expensive. The charges are applicable for every trade implemented and the calculation for the trading volume is conducted by considering the trading volume of the account in the last 30 days.

Deposits and Withdrawals

As mentioned before, Kraken is a Fiat gateway, which means deposits and withdrawals can be made in a wide array of Fiat currencies. It should be noted that like a number of other exchanges, Kraken also requires some Know Your Customer (KYC) procedures that need to be completed before funding can be done in a Fiat currency. A minimum of Tier 2 verification is needed for this purpose. After verification is complete, withdrawal can be made from the same bank account used for funding. The time taken for this withdrawal to be completed can depend on the location. For those living in the European Union, it takes a day or two for SEPA payments to clear.

In the case of International Swift wires, it will take at least 3 to 5 days to complete. Cryptocurrency can also be used for funding your account. Withdrawing below a certain limit only needs a level 1 verification.

Account Tiers

As discussed above, a tier based structure is used by Kraken when it comes to account limits for deposits and withdrawals. The list of tiers and their requirements are:
Tier 0: At this stage, you only need to provide your email address and you can look around the platform, but not be able to make any deposits or withdrawals.

  • Tier 1: You need to give your name, date of birth, phone number and country of residence. This verification allows you to deposit unlimited crypto, but there is a daily withdrawal limit and monthly withdrawal limit of $2,500 and $20,000 applicable respectively.
  • Tier 2: This requires you to provide your address as well. The deposit and withdrawal limit for fiat is $2,000 daily whereas daily crypto limit is increased to $5,000.
  • Tier 3: Most cryptocurrency traders go for this verification as Fiat can be deposited and withdrawn at a level of $25,000 daily. For crypto, the daily limit is increased to $50,000. A verified proof of residence has to be provided along with Social Security number and a government-issued ID card.
  • Tier 4: This is the highest form of verification at Kraken and is ideal for institutional or corporate accounts and high net worth traders. Limits on both Fiat and crypto are raised to $100,000 per day.

Kraken Trading Platform

Kraken recently upgraded their trading engine and the new trading interface has been quite impressive so far. There are a number of options at your disposal when you have to place an order. The easiest way to go about this is to use the ‘simple’ order form where you can enter your order with the most basic parameters. If you are someone who wants to enjoy greater control over their order types, you can opt for the advanced or intermediate order form. This will allow you to add several more parameters such as when the order will close or start and what currency do you want to pay the fee in. The amount of leverage you want to trade can also be chosen. The new Kraken trading interface allows you to place your orders easily. It boasts order books, live charts and market depth.

The charting package available is also spectacular as it has a graphing functionality and most of the required studies. Traders who make use of technical analysis will find this package to be immensely useful. The range of the order books and the span of the market depth can be adjusted and specific cryptocurrency pairs can also be added to the watch list.

Margin Trading

This is one of the features offered by Kraken, but is not available in any of the other big Fiat gateways. It allows you to trade on margin and leverage is available up to five times. This can provide traders with a solid edge. The currency that you are using for depositing the initial margin and your verification limits will impact the margin requirements on your trades. The crypto/fiat pairs available for margin trading are:



Traders who are also developers will find the advanced Kraken API quite useful. The public API can be used in the case of simple information such as volume, pricing and order books. However, if you are interested in developing a trading bot, the Kraken API can be accessed through the private access thereby allowing you to execute trades. Most algorithmic traders go for this option because they use technical indicators for making their decisions. Specific rate limits have been set for the Kraken API in order to prevent abuse by the traders and these limits determine the number of requests that can be made in a given period.

Dark Pool

Dark pool cryptocurrency trading is one of the most interesting features that can be found on Kraken. Through this useful feature, traders are able to make trades that cannot be seen by the rest of the market through the public order books. Kraken introduced this feature in 2015 and traders can use it for placing their orders anonymously. When these orders are placed, traders don’t reveal their intentions to others. Using a dark pool is a good idea because a large order can often influence the price of the cryptocurrency in the open market. The order would otherwise be visible in buy or sell walls, which could lead to panic buying and selling. The trade will not be executed due to this causing the trader to lose a good price.

Customer Support

The level of customer support provided at Kraken is of the highest industry standards. The exchange efficiently responds to all support tickets it receives. If traders want to get in touch with them, they can choose the chat option shown on the dashboard, which enables them to use live chat and is available 24/7. However, no phone support is offered at Kraken and not everyone will see this as a good thing. But, Kraken can be contacted through social media and they are quite responsive there.


Suffice it to say, Kraken is quite transparent as it documents all of its policies and procedures online. It comes off as a very secure cryptocurrency exchange and has some advanced procedures in place for warding off any potential hacking attempts. It is an excellent fiat gateway that boasts extensive funding options, which can be used by traders all over the globe. They have a huge range of cryptocurrency pairs, another perk that appeals to traders. Plus, traders enjoy the fact that they can enter into positions with moderate leverage thereby making the most out of moves in the short term.

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