Kraken Review: Accessible Crypto Investing for All Levels

Kraken is a fully functional crypto exchange with low fees and a good mix of coins. Sadly, U.S. investors can't benefit from all of its features, such as earning rewards and advanced trading. Even so, Kraken's reputation as a secure platform and important player in the crypto industry make it a solid choice. To find out if it's the best exchange and trading platform for you, read our full Kraken exchange review.

This cryptocurrency exchange is a good fit for: Crypto investors looking for low fees and a broad mix of cryptocurrencies.

Top perks

Kraken is a reputable cryptocurrency exchange that's been around for over a decade. It's a solid option with a lot going for it.

Security

Founded in 2011 and launched in 2013, Kraken is one of the largest and oldest exchanges in the world. And it's had its eyes on security from day one. The fact that it hasn't yet been hacked speaks for itself.

The U.S.-based exchange has consistently led the industry in security. It boasts both physical security and financial stability. Plus, it pushes users toward healthy security habits.

Range of cryptocurrencies

Kraken has over 245 cryptocurrencies and deals with seven fiat currencies. That's an impressive selection of cryptocurrency, and stands up well against some of the best cryptocurrency exchanges. Indeed, it's a big step up from many crypto brokers that only offer a handful of well-known coins. Kraken also boasts a high liquidity, meaning it is easier to buy and sell at a fair price.

Low fees

Kraken's fees are on par with -- or lower than -- several top exchanges. It isn't the cheapest, but the maker-taker fees on its Pro platform are lower than, say, Coinbase. Be aware that fees can add up if you use the instant buy feature rather than the Pro platform. I learned the hard way that the fees are much higher with this feature.

Consider how much it will cost you to deposit and withdraw money, as well as what you'll pay for each transaction.

What could be improved

Issues with the SEC

Kraken is one of several crypto exchanges in the SEC's crosshairs. The SEC accuses the exchange of selling unregistered securities, among other problems. Kraken denies the charges and has filed a motion to dismiss them.

Not available in all states

Kraken is not available in New York or Washington State. There are also a number of restrictions on how U.S. residents can use its service. For example, American users cannot earn rewards via staking or trade futures on the exchange. Plus, margin trading is restricted to institutional investors and high-net-worth individuals. That said, margin trading is risky, especially with a volatile asset like crypto.

Customer service

This crypto exchange boasts 24/7 customer service, and has an easy-to-navigate help center. That said, it only scores 2.0 out of 5 on Trustpilot. It's always difficult to know for sure how trustworthy those reviews are, but a low score does raise some questions. Several reviews complain that their money didn't arrive in their account and that the support desk hadn't responded. That said, I appreciate the fact that Kraken has both live support and a phone number you can call. This isn't an option on many crypto exchanges.

If you want to dip your toe into the crypto waters: Robinhood offers a limited number of cryptocurrencies but also lets you buy stocks and ETFs with low fees.

If you want to pay by debit card: Coinbase is a popular exchange with a user-friendly interface. It lets you transfer cash from your bank account electronically or pay using a debit card.

Kraken is pure crypto exchange. It doesn't try to offer savings accounts or loans. It is a centralized exchange that you can access via a browser or through its mobile apps. Kraken has four web-based platforms to suit different types of investors:

• Kraken: Ideal for beginner investors, with a user friendly interface where you can buy and sell a range of cryptos.
• Kraken Pro: A more advanced trading platform with lower fees and additional features.
• Kraken Classic: A legacy platform for users who want to stick to the original Kraken site.
• NFT Marketplace: A place to buy, sell, and manage NFTs.

Kraken and Kraken Pro both have matching highly rated mobile apps. It's relatively easy to move funds between the two account types. As we'll see in the fee section, it is worth getting to grips with the advanced platform if you want to reduce your crypto fees. Users can leave assets on the platform, but it encourages people to move them to an external crypto wallet. Kraken stresses that it is an exchange, rather than a wallet service.

Restrictions for U.S. users

U.S. residents cannot access all of Kraken's services. This is not unusual -- many top crypto exchanges restrict activity in America to try to comply with U.S. regulations. However, it means some of the features that make Kraken popular internationally are not available in the U.S.

Here are some restrictions to be aware of:

• Margin trading is only available to high-net-worth individuals or institutional investors in the U.S. That means having more than $10 million in assets yourself or representing a company that does so. U.S. clients also cannot trade futures.
• U.S. residents cannot earn staking rewards. Staking is a way to earn rewards on certain cryptos by locking them up to contribute to the network's security. If staking is important to you, check out our top crypto staking platforms.
• Kraken is not available at all in New York or Washington. Users in Texas cannot link their bank accounts via ACH to make free deposits.
• Some altcoins are not available in the U.S. Kraken's restrictions are not as strict as some platforms, but almost 50 cryptos are not available to American residents.
• U.S. investors cannot deposit fiat money via credit card. Clients in some other countries buy crypto via credit card, Google Pay, and Apple Pay. American users can only deposit through a bank transfer or debit card.

Kraken fees depend heavily on how you use the platform. As with several other crypto exchanges, you'll pay significantly more to use its instant buy/convert feature on the beginner platform than to trade on its Pro platform. In terms of deposits, you can deposit money in the U.S. via a Plaid bank transfer for free, but less for other ways of depositing fiat money depending on your payment method.

For example, there's a fee and a variable spread to consider when using the instant buy function with a debit card. Kraken does not publish fees on its website, but displays the fee when you make a transaction. To buy $50 worth of ETH via debit card, I paid a fee of $2.84 (about 5% of the transaction) plus a spread of almost 1%. There's a $10 minimum purchase amount as well as a cap on how much you can buy in any seven-day period.

Kraken also charges withdrawal fees. As with other top crypto exchanges, the crypto withdrawal fee depends on the cryptocurrency and blockchain network involved. USD withdrawals to a U.S. bank account are free via ACH, but can take up to two business days to process. You cannot withdraw to a credit card, debit card, or third-party payments processor. It's also worth knowing that when you buy crypto in USD using a credit or debit card, it may trigger a 72 hour withdrawal hold.

Maker-taker fees on Kraken Pro

Stablecoin and FX pairs

Fees are slightly different to trade stablecoin and FX pairs:

Kraken stands out for its strong mix of cryptocurrencies. It has around 245 cryptocurrencies available worldwide and almost 200 of them are available to U.S. investors. You can buy all the top cryptos on Kraken, including:

• Bitcoin (BTC)
• Ethereum (ETH)
• Solana (SOL)
• Cardano (ADA)
• Dogecoin (DOGE)

Kraken also supports popular stablecoins, such as Tether (USDT) and USD Coin (USDC). Kraken supports deposits in various fiat currencies; however, U.S. users cannot use the platform to swap USD into other currencies such as euros or pound sterling.

Security is one of Kraken's founding principles. It hasn't been hacked since it launched in 2013 and is widely recognized as one of the most secure cryptocurrency exchanges. One aspect of Kraken's security that I appreciate is that you can set up different two-factor authentication (2FA) codes for specific activities -- such as sign in, funding, or resetting your password. However, I would like it to have New York's hard-to-get BitLicense, which offers an extra stamp of security reassurance.

All cryptocurrency investing carries risks. In addition to the volatility, it is a relatively new asset class and there's a lot we don't know about how it will unfold. Crypto prices could collapse completely. Plus, cryptocurrency security is a hotly debated topic and any exchange can be susceptible to hacks. Here's more on Kraken's approach to security.

• Coin storage: Kraken uses a mix of hot wallets and cold storage (essentially offline and protected against hacks).
• Platform and information security: Its physical servers are kept under 24/7 surveillance. Sensitive information is encrypted at both a system and data level.
• Security testing: Ongoing penetration tests protect Kraken's systems, both via its internal team and bug bounty program. The bug bounty programs incentivize ethical hackers to find and report bugs.
• User security features and education: With two-factor authentication, secure emails, real-time monitoring, and security locks, Kraken does a lot to help users keep their accounts secure. On top of which, it supplements its security by teaching users how to protect their accounts.

Proof of reserves

The collapse of high profile crypto exchanges showed us that crypto security goes further than the way a platform stores your assets. Unlike money in a bank, cryptocurrency is not protected against platform failure by FDIC insurance. If you plan to leave your funds on the exchange where you bought them, it is important you trust the exchange. One way to do that is to check its proof of reserves.

Kraken says all client deposits are backed by real assets. It uses an independent auditor to verify that it has enough funds to cover all potential client withdrawals. Users can check the proof of reserves for their own accounts by logging on to Kraken Pro. In the absence of increased crypto regulation, proof of reserves can give crypto investors more confidence that their money is safe. Even so, critics have pointed out it isn't perfect.

Kraken and the SEC

Kraken is one of several crypto exchanges that has found itself in hot water with the SEC. In February 2023, Kraken paid $30 million to settle a separate SEC case. At the time, the SEC argued that its staking services did not provide the necessary disclosures and safeguards to investors. Kraken shut down its staking services in the U.S. as a result.

In November 2023, the SEC accused Kraken of operating as an unregistered securities exchange. The crux of its argument is that many cryptocurrencies are unregistered securities -- what it calls crypto asset securities. There are strict rules about how securities can be traded, and the SEC believes that crypto platforms who are not registered with the SEC should not be facilitating this trading. It also accuses Kraken of commingling crypto assets with its own. As an investor, it is important to be aware of the charges because they could have an impact on your assets and your ability to buy and sell crypto.

Kraken has filed a motion to dismiss the charges. It argues that:

• The SEC is wrong to say cryptocurrencies are unregistered securities. It says the SEC hasn't done enough to show that the cryptos in question should be treated as securities.
• The SEC is attempting to claim jurisdiction over crypto by filing court cases instead of petitioning Congress. It accuses the SEC of overreach and says that granting its motion would give it authority over all kinds of other assets, such as sports memorabilia and classic watches.

• You want to access a wide range of cryptocurrencies on a secure platform.
• You are comfortable using the Pro platform to reduce your fees.
• You are based outside the U.S. and want to access additional features, such as staking and margin trading.