Kraken’s Journey: From Security Breach Recovery to Global Expansion

Kraken, one of the most prominent cryptocurrency exchanges, gained credibility early on by assisting in the investigation and recovery of lost funds following the infamous Mt. Gox collapse. This involvement solidified Kraken’s reputation in the crypto world.

In 2015, Kraken entered the Japanese and European markets, introducing margin trading. The exchange expanded further in 2016 with the acquisition of two North American exchanges, Coinsetter and Cavirtex, and CleverCoin, a Dutch cryptocurrency exchange, establishing a stronger European presence.

A successful Series B funding round in 2017 raised $100 million, allowing Kraken to improve its infrastructure and customer support. In 2019, the acquisition of Crypto Facilities, a UK-regulated futures trading platform, enabled Kraken to offer cryptocurrency futures and indices.

Kraken made history by becoming the first U.S. cryptocurrency exchange to receive a Special Purpose Depository Institution (SPDI) charter from Wyoming, allowing it to offer banking services. With the launch of Kraken Bank, the exchange sought to bridge the gap between cryptocurrencies and traditional banking.

The introduction of mobile trading apps for iOS and Android in 2021, coupled with record trading volumes, fueled further growth. Kraken expanded into new markets, including Australia and several European countries, gaining regulatory approval along the way.

In 2022, Kraken announced plans for an IPO and introduced features such as NFT trading and expanded DeFi offerings. Jesse Powell stepped down as CEO, with COO David Ripley taking over. Powell remains the company’s chairman and largest shareholder.

Services Offered by Kraken

Kraken caters to both individual and institutional traders with a range of services, including spot trading, margin trading with leverage, and futures trading for various cryptocurrencies. The exchange also supports large-volume over-the-counter trading.

Kraken provides staking services for earning rewards on crypto holdings and has introduced NFT trading and DeFi offerings, expanding its product portfolio to meet the evolving needs of the market.

How to Open a Kraken Account

To open a Kraken account, users must complete a registration process, including a know-your-customer (KYC) verification, typically requiring a government-issued ID and proof of residence. Kraken operates a tiered verification system where higher levels unlock more features and increased limits but require more comprehensive identity checks. Two-factor authentication (2FA) is also required for added security.

Kraken’s Fee Structure

Kraken uses a maker-taker fee model, where fees depend on whether users are providing or removing liquidity. For spot trading, maker fees range from 0.00% to 0.25%, while taker fees range from 0.10% to 0.4%. Margin trading incurs additional fees based on the borrowed amount and loan duration. Kraken charges withdrawal fees, which vary by cryptocurrency, though deposits are generally free, except for some fiat transactions that may incur small fees.

Throughout its history, Kraken has faced regulatory challenges, including scrutiny from the Commodity Futures Trading Commission (CFTC) and the Securities and Exchange Commission (SEC). In September 2021, the CFTC fined Kraken $1.25 million for illegal margin trading. In November 2023, the SEC sued Kraken’s parent companies for allegedly operating an unregistered securities trading platform and commingling investor assets. Kraken is actively seeking to dismiss the lawsuit.