Exchange Review: Kraken

Kraken
  • Editor Rating
  • Rated 3.1 stars
  • 62%

  • Kraken
  • Reviewed by:
  • Published on:
  • Last modified: November 4, 2016
  • Trades
    Editor: 76%
  • Funding
    Editor: 49%
  • Compliance
    Editor: 51%
  • Platform
    Editor: 64%
  • Help & Support
    Editor: 66%

Kraken is part of Payward, Inc. which has been around since 2012. The exchange is based on the U.S. and has its headquarter in San Francisco, California.

Trades

Kraken does not offer trading between many cryptocurrency pairs, less than ten different cryptocurrencies are available for trading. It is one of the few weaknesses concerning the trading options, but it is possible to trade directly between all available pairs. Furthermore, three fiat currencies are available for trading including Dollars, Euros and Pounds. The trade fees are decent at 0.35 percent per trade. This amount drops depending on the amount traded in total. The bid-ask spreads are typically very low at 0.05 percent or less for BTC/EUR, but the liquidity on BTC/USD is not so good with a bid-ask spread of around 0.90 percent.

For those looking for maximum control over their trades, Kraken is an excellent choice. The exchange offers normal market and limit orders, but also advanced order types. The latter order type allows traders to place an order with predefined triggers. More on advanced order types can be read here. As of May 2015 Kraken also supports margin trading/short selling with a maximum leverage of 3:1.

Funding

The funding options offer an explanation why there is more Euro liquidity on the platform. For Euro deposits fees are low due to the availability of SEPA transfers, but USD deposits coming from the U.S. are limited to (expensive) wire transfers. Additional fees apply to wire transfers, and there is also a minimum deposit amount. It should be added that both methods are not the fastest way to make a deposit, as a transaction may take multiple business days to be processed.

Compliance

Kraken (Payward Ventures, Inc.) is registered with FinCEN, and has even been subject to a “Proof of Reverses” audit. The audit was carried out by the CTO of Ripple Labs, Stefan Thomas, who concluded that 100 percent of Kraken’s Bitcoins are held in reserve. The details of the audit have also been released to the public. These audits prove that at least money is not leaking from the exchange, as was the case for the now bankrupted exchange Mt.Gox. Sadly, Kraken has not provided a new Proof of Reserves audit since March 2014, which has become obsolete over time. Furthermore, audits should be executed by recognized professional auditors, not focusing on just reverses but also security. Lastly, this should not be limited to spot checks (current situations), but also focus on the governance that should ensure consistency in the future.

Platform

Despite offering advanced order types, Kraken still offers a professional and simple interface. Users can choose their preferred view (intermediate or advanced) depending on their requirements. It can be confusing that Kraken has its own naming conventions. For example, on Kraken BTC is known as XBT. Lastly, the website only runs well on desktop as it is not fully responsive. Mobile users on iOS can use the available app, but this one does not include trading options. Performance analysis tools and research amenities are not present. Following common practices, accounts can be secured with two-factor authentication.

Help & Support

With an extensive trading guide and FAQ, Kraken does just intensively cover all of the website’s functionalities. The documentation also offers a lot of additional information on cryptocurrencies and trading related terminology. It therefore has a lot of educational value. Compared to the documentation, the support availability is a bit limited. Support can be contacted through email, which is the only way possible.

Pros

• Strong liquidity in EUR markets
• Margin trading / short selling supported
• Extensive documentation high on educational value

Cons

• Weak support for mobile platforms
• Expensive to use for non-European users

  • I actually really like Kraken; however, the last time I used them they were not offering leveraged trading due to low liquidity. Looks like I’ll be sticking to Bitfinex for now

    • This week I will do a review on MintPal, but I might include Bitfinex for next week 🙂 I don’t know the exchange that well, it depends on what “testing phase” is supposed to mean. Since it is operating from Hong Kong, it may also take some extra effort to determine the compliance score.

    • In an unexpected turn of events, that review turned into a warning.

  • John Dee

    Maybe they were ok a few years ago. But now that they have a teenager-level management and are growing, the service is worse than in paypal. i transferred money to the account and it was frozen for no reason. no response to multiple requests to their support. a week has passed – no money, no bitcoins. maybe it is another mt.gox unfolding. stay away, it is not what it once was.

  • Cristian Francu

    I have been with Clevercoin, a Netherlands trader, which was bought by Kraken. The quality deteriorated instantly. Same as John Dee, I transferred money to the account, it’s been on hold for two weeks. They ignored all my support emails. In the mean time BTC has gone up 6.27%. I wonder if I’m going to see my money back.