What is and how does the crypto exchange Kraken work

Kraken is a famous American crypto exchange.

It is one of the oldest, as the company was founded in 2011 in San Francisco, only two years after the creation of Bitcoin.

Actually, if we only consider the crypto exchanges still in full operation, it is one of the very few still existing among those founded before the first Bitcoin halving in 2012.

Summary

• The history of the crypto exchange Kraken
• Legal issues
• The advantages of the Kraken crypto exchange
• The features
• The guide

The history of the crypto exchange Kraken

The real crypto exchange, however, was launched only in September 2013, two years after the company was founded and in the midst of a bull market, and at that time it only offered exchanges in Bitcoin (BTC) and Litecoin (LTC). Then over time it greatly expanded its catalog.

By the way, its co-founder Jesse Powell was a consultant for Mt. Gox before founding Kraken, and Mt. Gox was the very first known exchange in the world that allowed the public buying and selling of Bitcoin, already in 2010.

With the closure of Mt. Gox in 2014, other crypto exchanges took its place, including Kraken. At the time, the vast majority of BTC exchanges were happening on Mt. Gox, so when it closed, it opened the floodgates for competitors.

Indeed, the following month Kraken raised 5 million dollars from Hummingbird Ventures and Bitcoin Opportunity Fund through a Series A investment. A month later, it became one of the first crypto exchanges to be listed on the Bloomberg Terminal.

In 2020, it became the first crypto exchange to become a SPDI (Special Purpose Depository Institution) in the USA.

Among US crypto exchanges, it is the second most important, behind Coinbase, although there are also other non-US exchanges operating in the USA that record higher trading volumes than Kraken, starting from Crypto.com.

What sets Kraken apart, however, is its adherence to US regulations, to the point that it is sometimes used for institutional purposes.

Furthermore, it also supports the euro, making it one of the most widely used crypto exchanges in Europe, thanks to its branches on the continent.

Legal issues

The exchange, like many others, has had to deal with various legal issues, especially in the United States of America.

Actually, to tell the truth, Kraken’s relationship with authorities in the past has been a bit turbulent.

However, over time it seems that they have been able to resolve them all, like last year’s against the SEC accusing him of offering investment contracts without the necessary authorizations (for example for staking services).

So on one hand it is necessary to highlight that the crypto exchange has had to face several legal issues in the past, but on the other hand it is also important to underline that they all seem to have been resolved, although sometimes with agreements that did not necessarily provide a complete absolution for not having committed any wrongdoing.

The advantages of the Kraken crypto exchange

From a strictly technological point of view, Kraken does not seem to offer any particular advantages compared to other similar platforms.

However, it offers a couple of advantages that may be interesting for some investors or speculators.

The first, as already mentioned, is compliance with regulations.

Indeed, despite the fact that its actions have been contested several times from this point of view, in the end Kraken has always managed to come out of it in a way that complies with current regulations.

So whoever chooses to use this exchange knows that in theory they should not run any risk, as far as US regulations are concerned. This level of compliance probably also applies to European markets, where Kraken is quite popular.

The other advantage is the lack of major obstacles in the use of fiat currencies.

When it comes to crypto exchange, various issues often arise with fiat currency transfers. Kraken seems to be one of the most reliable in this respect, also because it is quite well known to those who need to carry out these types of checks.

Moreover, it does not have particularly high commissions, as sometimes happens with competitors, making it one of the best for deposits and withdrawals in dollars and euros.

The features

In addition to the classic spot crypto trading, in fiat currencies, stablecoins or other cryptos, the exchange also offers other features, but dedicated to a more advanced audience.

First of all, they also allow trading of crypto futures.

They also allow margin trading with leverage up to 5x.

They also provide a Pro platform for more experienced users with greater needs, while the basic interface is dedicated to users with fewer needs or beginners.

Moreover, it is also easily usable from the dedicated smartphone app, which makes its use very simple. However, Kraken offers its users three different apps, because in addition to the simple basic one, there is also the Pro version for more experienced users, and a non-custodial wallet for those who want to store their tokens without having to rely on them.

One of the advanced level features they offer is Over-The-Counter (OTC) exchanges, designed for those who need to buy or sell very significant amounts of cryptocurrencies.

Together with Coinbase, it is one of the largest OTC desks in the United States of America, precisely because of its high level of compliance.

Also noteworthy is their customer service, which generally provides good quality service, 24 hours a day, seven days a week.

The guide

Using the basic features of Kraken is practically the same as using those of other exchanges.

What changes is mainly the use of the Pro version, intended for more advanced users.

In this regard, they have published a guide that allows you to become familiar with advanced features.

It must be said that generally the basic version is primarily suitable for beginners, or for those who really only need a few basic features.

Anyone with even slightly more complex needs would do well to learn how to use the Pro version, also because on the basic version there is always the risk of having to pay higher fees, or in any case dealing with larger spreads. However, this discussion applies to any crypto exchange, not just Kraken.

There is also a generic guide for the entire exchange that also includes basic functionalities, but these are perfectly in line with those of any other exchange.

The exchange is available in five languages, including not only English but also Spanish, French, Portuguese, and Italian. After all, it is mainly used in America and Europe.

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