Kraken: How to Get Started on the Crypto Exchange

We take a look at the pros and cons of one of the older crypto exchanges on the market. Here’s what you need to know about Kraken.
Updated Sep 22, 2022 at 9:39 p.m. UTC
Crypto Explainer+

Stephan Roth is a London-based financial journalist and has reported on crypto since 2018. He has previously worked for KPMG, CNNMoney and ACCOINTING.

Kraken is a centralized crypto exchange co-founded by Jesse Powell and Thanh Luu in 2011, making it one of the oldest exchanges in the space. Powell, who has made headlines for his “anti-woke” workplace stance, recently stepped down as the company’s CEO. Kraken’s current chief operating officer, Dave Ripley, will take over as CEO once someone is hired to fill Ripley's position.

Kraken officially launched its exchange in 2013 and offered bitcoin, litecoin and euro trades. Over the years both its offerings and its clients have grown. Currently, Kraken allows investors to purchase over 100 cryptos and serves 9 million clients in nearly 200 countries.

Since 2013, the exchange has added staking, margin trading and futures, and has announced plans to launch a non-fungible token (NFT) marketplace. The exchange offers both a desktop and mobile app for users.

Here’s how to get started on the exchange and some of the key factors that you should consider when deciding if it’s the right exchange for you.

How to sign up on Kraken

The first thing you're going to have to do is create an account. Head over to Kraken.com and click on the sign-in button on the top right-hand corner of the screen.

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Kraken home page (Kraken)

Follow the sign-up procedure: Add your name, contact details and then click on submit. Once that's done, Kraken will send you an email for you to activate your newly created account and enter the activation code.

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Kraken verification code (Kraken)

After having typed in the activation code you are technically signed up. However, if you want to actually use the exchange service and not just poke around the interface, you're going to have to go through another verification step.

Kraken asks for different levels of verification depending on what services you want to use. The more information you are willing to divulge, the more features you will have access to use. But the more pro you go, the more time it will take to verify your documents. Because you're just getting started, we recommend going through enough of the know-your-customer (KYC) process to get access to the intermediate level (shown below), which will allow you to most of the most-used features.

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Kraken account levels (Kraken)

Once you've verified your account you can start buying and selling crypto on Kraken. Depending on where you live, you can fund your account with fiat deposits via wire or ACH bank transfers, credit card or with crypto by transferring from another exchange.

Kraken’s pros

When trying something new, it's always good to take a positive approach before dishing the dirt, so let's begin by looking at some of the pros of Kraken's platform.

Easy to navigate

The most important thing about any platform, app or program is its simplicity and ease of use. Kraken's design makes it very intuitive to navigate the exchange platform for the first time.

Clean and simple, the headline and its ribbons are easy to find and understand. Whether it's the prices of the various cryptos Kraken has to offer or its learn content that will help you get up to scratch with your crypto knowledge, everything can be accessed from the central dashboard.

One of the more tricky things to do when starting out on a new exchange is to make a deposit. Kraken makes sure you can easily generate an address to which you can deposit funds on the platform.

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Funding a Kraken account (Kraken)

Affordable fees

Like most exchanges, Kraken charges you fees for buying cryptocurrency. There are two ways to buy cryptos: Kraken Pro or Instant Buy. If you're just starting out, the Instant Buy method is the easiest to use.

For the easiest way to purchase crypto, you can do cash-to-crypto and crypto-to-crypto transactions. However, you will pay a 0.9% fee if you buy stablecoins with another stablecoin and up 1.5% if you purchase a stablecoin with non-stablecoin crypto.

When transferring money from your bank account to Kraken's exchange you will also be subject to fees. If you moved $100 to Kraken, you would end up with $98 worth of crypto as opposed to the $100 you transferred.

That being said, Kraken still has lower-than-average fees for ots most basic transfer option when compared with other exchanges such as Coinbase.

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Kraken fees (Kraken)

Security

If security is a top priority, Kraken will meet your needs. It offers a solid verification process, two-factor authentication and a global time lock setting for when you're away from the platform.

Kraken has also started to conduct proof of reserve audits, an industry-leading step to help verify investors' balances. So far, BTC, ETH, USDT, USDC, XRP, ADA and DOT, which account for 63% of holdings, are audited.

Kraken also says that 95% of its deposits are held offline in cold storage. The company also claims that its service is monitored around the clock by guards and technological surveillance tools.

Kraken's cons

Despite all the pros, Kraken is not infallible. There are cons that could make it not a fit for your needs.

Availability

The key area Kraken could improve upon is its availability in different jurisdictions. For instance, investors residing in New York and Washington state in the U.S. cannot access Kraken's platform. In Germany and the U.K., traders cannot use off-chain staking.

This, of course, narrows Kraken's reach and means that investors should check if they can access Kraken's services in their countries.

A lack of service to certain areas is a serious con if you are in one of those areas.

Verification is a lengthy process

Having opened a new account and gone through the process of verifying from start to finish, the time taken to get fully verified is not insignificant. Although Kraken states how long each step should take, realistically it takes longer than estimated.

The first verification step should take one to two minutes, according to Kraken, but it was closer to 10 minutes until Kraken verified my documents. For the second verification step it took the exchange roughly an hour to complete its check – about 50 minutes longer than advertised.

Although a minor detail, this can be a deterrent for new investors looking to access the exchange.

No Kraken wallet

Finally, Kraken does not offer a crypto wallet as part of its suite. Many major exchanges such as Coinbase offer a self-custody wallet that allows investors to keep control of their keys, data and crypto. Kraken does not. This is a negative for people who value having complete control over their investments.



This article was originally published on Sep 22, 2022 at 9:38 p.m. UTC

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Stephan Roth is a London-based financial journalist and has reported on crypto since 2018. He has previously worked for KPMG, CNNMoney and ACCOINTING.

CoinDesk - Unknown

Stephan Roth is a London-based financial journalist and has reported on crypto since 2018. He has previously worked for KPMG, CNNMoney and ACCOINTING.


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