Kraken is a major cryptocurrency exchange founded in 2011 in San Francisco and launched in 2013. It was founded by Jesse Powell, Tan Lu, and Michael Gronager, and started from Powell’s observation of the vulnerability of Mt. Gox and his desire to create a more secure and reliable cryptocurrency exchange.
Powell’s premonition about Mt. Gox was later proven right after the infamous security breach and collapse. Kraken was chosen to help investigate and recover the lost funds, further solidifying its credibility.
Kraken also introduced margin trading in 2015 when it entered the Japanese and European markets. In 2016, Kraken acquired two North American exchanges, Coinsetter and Cavirtex. It also entered Europe by acquiring CleverCoin, a Dutch cryptocurrency exchange.
In 2017, it raised $100 million in a successful Series B funding round, which it used to improve its infrastructure and customer support. In 2019, Kraken acquired Crypto Facilities, a regulated futures trading platform in the UK, enabling it to offer cryptocurrency futures and indices.
Kraken became the first U.S. cryptocurrency exchange to receive a special purpose depository institution charter in Wyoming, which allows it to offer comprehensive banking services. Kraken also launched Kraken Bank to bridge the gap between crypto and traditional banking.
Record trading volumes in 2021 and the introduction of mobile trading apps for iOS and Android have enabled trading on the go. Kraken has continued to expand globally, receiving regulatory approval to operate in new markets including Australia and several European countries.
In 2022, Kraken announced plans for an IPO. The exchange also introduced new features like NFT trading and expanded its DeFi offerings. Additionally, Powell has stepped down as CEO of the company and has been replaced by David Ripley, who was previously the company’s COO. Although Powell is no longer CEO of the company, he remains involved in the company, serves as chairman of the board, and is the company’s largest shareholder.
What services does Kraken provide?
Kraken offers a wide range of services for individual and institutional traders, including spot trading, margin trading with leverage, and futures trading for a variety of cryptocurrencies. The exchange also supports over-the-counter trading for large volumes.
Kraken also offers staking services, allowing users to earn rewards for their cryptocurrency holdings. Furthermore, Kraken has continued to expand its portfolio to meet the changing needs of the cryptocurrency market by introducing new services such as NFT trading and DeFi offerings.
What do I need for a Kraken account?
To open a Kraken account, users must complete a registration process, which typically involves a Know Your Customer (KYC) process that involves submitting a government-issued ID and proof of residence.
Kraken uses a tiered verification system, with higher tiers offering more limits and access to more features, but requiring more comprehensive identity verification. Users are also required to set up two-factor authentication (2FA) to further enhance account security.
What fees does Kraken charge?
Kraken uses a maker-taker fee model, where fees vary depending on whether the user is a maker (providing liquidity) or a taker (removing liquidity). Fees are also tiered, decreasing as trading volume increases over a 30-day period.
For spot trading, the maker fee is 0.00%~0.25%, and the taker fee is 0.10%~0.4%. Margin trading charges additional fees depending on the loan amount and loan period. Kraken also charges withdrawal fees that vary depending on the cryptocurrency, but deposits are generally free, with the exception of certain fiat currency trading, which may incur a small fee. Account opening is free.
Kraken’s Regulatory/Legal Battle
Kraken has navigated a variety of regulatory and legal issues throughout its history. The exchange has been subject to scrutiny by U.S. regulators, including the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC), regarding its trading practices and compliance measures.
In September 2021, the CFTC fined Kraken $1.25 million for offering illegal margin retail trading.
In November 2023 The SEC has sued Kraken. Parent companies Payward and Payward Ventures were accused of operating an online securities trading platform without registration. The SEC also alleged that Kraken “commung investors’ assets with its own.” Kraken is moving to dismiss the lawsuit.
Disclaimer: This article was created with the help of OpenAI’s ChatGPT 3.5/4 and has been reviewed and edited by our editorial team.
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