Kraken is a centralized cryptocurrency exchange (CEX) that launched in 2013. It offers spot and options markets. Kraken spot and margin trading services are available in most countries, with some regional restrictions. There are over 600 Kraken trading pairs, including digital and fiat currencies.
The Kraken cryptocurrency exchange complies with Know Your Customer (KYC) regulations. Users must have verified accounts and provide proof of residence in one of the countries where Kraken is available. Furthermore, the legal name on the user’s credit or debit card must match the name provided on their Kraken account.
The Kraken spot market uses the maker-taker model to complete orders. The fee schedules are established using 30-day trading data. Incentives are used to promote active market behavior. There are nine tiers based on the customers’ 30-day Kraken volume in USD.
Tier 1 traders do not exceed the 30-day volume of $50,000. In this tier, the Kraken spot market makers pay 0.16% fees, while takers pay 0.26%. The Kraken exchange fees progressively decrease as the volume increases. At tier 9, where the 30-day trade volume exceeds $10 million, takers pay 0.10% fees while the maker fee is down to 0.00%.
Kraken trading volume for stablecoins is broken into six tiers. At tier 1, both makers and takers pay 0.20% in fees. If the Kraken crypto price value for the stablecoin volume exceeds $1 million, it falls under tier 6. Here, neither market takers nor market makers are required to pay any fees.
Margin fees on the Kraken cryptocurrency exchange vary according to the base currency. For example, the opening fee for Bitcoin (BTC) is 0.01%, and the rollover fee is 0.01% per 4 hours, while Ethereum (ETH) traders must pay a 0.02% opening fee and a 0.02% rollover fee per 4 hours.
In 2019, Kraken acquired the Crypto Facilities exchange, later renamed Kraken Futures. It offers futures trading with up to 50x leverage and over-the-counter (OTC) trading for large-scale orders. The Kraken crypto exchange can also facilitate personalized account management for professional traders.
Kraken offers an Instant Buy function, allowing users to purchase cryptocurrencies using their credit and debit cards, online banking services, or digital wallets. There are fixed Kraken crypto fees for making purchases. A 0.9% fee applies to stablecoins, and 1.5% applies to any other cryptocurrency or crypto-fiat pair.
If customers purchase crypto using a card or a digital wallet, the applicable Kraken crypto fees for processing are 3.75% + 0.25 cents. Customers using online banking must pay a 0.5% processing fee. Minimum order size restrictions apply based on the purchase method.
About the Company
Kraken was founded in 2011 and officially launched two years later, making it one of the longest-running cryptocurrency exchanges. It was founded by Jesse Powell as a successor to Mt. Gox, the now-defunct bitcoin exchange. The headquarters are based in San Francisco, CA.
The first Kraken trading pairs included combinations of Bitcoin, Litecoin, and euro. Following in the footsteps of Mt. Gox, Kraken first focused on Bitcoin trading. In over a decade, the Kraken spot market catalog has been expanded to include more than 100 cryptocurrencies.
The average daily Kraken trade volume typically varies between 500 million and $1 billion. In May 2021, it recorded its highest daily trading volume for the fiscal year. On May 19, the daily Kraken volume exceeded $8 billion. According to data, by 2022, the Kraken crypto exchange was valued at $11 billion.
According to the company’s 2021 overview report, the Kraken crypto price value for paid-out staking rewards was over $500 million. In January of that year, the Kraken trade volume was valued at $56 billion, exceeding the volume accumulated throughout the entirety of 2019.
In 2020, Kraken was granted permission by the State of Wyoming to act as a bank charter. Kraken Bank, which is set to launch in 2022, aims to be the first cryptocurrency bank in the USA.
Jesse Powell is the CEO at Kraken. He has been involved with the development of digital currencies since 2001, years before the rise of blockchain-based cryptocurrencies. Powell started working on the Kraken crypto exchange project after learning of security issues at Mt. Gox.