Kraken

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Kraken logo

Founded by its current CEO Jesse Powell on the 28th of July, 2011 and going live in September 2013 after two years of beta testing, Kraken is one of the biggest, oldest and best trusted exchanges around, with a wing span extending over the US, EU, Japan, and Canada.

4 tiers of verification (Tier 4 for high volume users and corporations), professional 24/7 staff, margin trading functionality, a Bitcoin dark pool, and a range of order types)

(like Take Profit orders and combined order types) are reason enough to substantiate Kraken’s claim to be the “the best bitcoin exchange for serious and professional bitcoin traders”.  

Still, periodically getting named the best/most important exchange in the business by Upstart Business Journal, The Cointelegraph Exchange Awards, the founder and director of research at Post Oak Labs Tim Swanson, and TheBlogChain (11 out of 10 grading for security, describing Kraken as “an exemplary institution that the rest of the Bitcoin world should look up to“)  is likely Kraken’s most impressive achievement to date.

Kraken was also the first Bitcoin exchange on Bloomberg, first in the world to pass a cryptographically verifiable “proof of reserves” audit and set up a “fully regulated and licensed financial services entity” (in other words, a cryptocurrency bank)  in tandem with BAFIN-regulated Fidor.

Tiers

Jesse Powell

Kraken also offers some of the more formidable security checks around, with 5 Tiers, from 0 to 4.

For example, Tier 2 enables the user to trade in digital and fiat currencies plus deposit and withdraw using digital currency only, and this is achieved by submitting minimum level contact details like date of birth, country of residence, phone number, and so on. With the higher Tiers, provided a user submits documents of a more significant level, more functionality is available as well as seriously increased limits.

The highest level, Tier 4, is for corporate clients and VIPs and involves submission of KYC data and a signed application form.

At the lowest levels, it takes from 1 to 60 minutes to get verified, and manual checks with the other Tiers take up to 5 days.

Accessibility

At the same time, its abundance of functionality may make it a suitable platform to master cryptocurrency trading, even if it proves time- and resource-consuming at first.

Expansion and scalability

In connection with its climbing popularity and rapidly growing numbers of users Kraken had to shut down for a week in January 2018, reopening after taking some time with an update that was planned to last 2 hours. In 2017, Kraken took some damage with cyber attacks that caused lagging service. That, and what was described by the CEO as “Jevon’s paradox”, resulted in an apology from the administration:

“We certainly haven’t abandoned the exchange and we do care about making improvements. We had a nice roadmap for building our fancy new ship, which was blown up by the recent explosion of growth. Rather than be able to dedicate our efforts to the new platform, we’ve had to split efforts with water bailing and fire extinguishing.”

Fees

Kraken offers some of the lowest fees in the business, quoting (for instance) 0.14% Maker fees for Euros, and a ฿0.0005 Bitcoin fee compared to the average across the industry for exchanges,  and undoubtedly a very favorable rate compared to the banking institutions.

Maker and Taker fees constitute a percentage of the trade volume: the greater the volumes of the trade, the lower the fees (down to 0.0%).

Security

Kraken has never been hacked according to The Wall Street Journal (article).

Although there have been reports of user accounts breached, Kraken released a statement on July 22nd, 2016 to the effect that to date Kraken has not been hacked, and there is no record of any such occurrence so far:

“Kraken not hacked. Some individual accounts without 2-factor login protection were hacked. Always protect your accounts with 2-factor.”

Since then Kraken made a point of adding the Master Key feature.

Master Key

Kraken provides a feature that will enable the user to recover access to their account or (hopefully) prevent access by malicious third parties. A so-called Master Key allows users to get past 2FA, turn off The Global Settings Lock or stop a hacker from resetting the password.

Kraken identifies this as a useful security feature that is recommended for all users and advises not to store the Master Key in the same place as other documentation concerning account data. This dedication to multiple layers of security likely contributed to Kraken getting named No.1 for security by industry experts.