Kraken
exchangeKraken is a US-based custodial exchange founded in 2011 with no customer fund losses from hacks, 95% cold storage, and proof-of-reserves audits.
Platform Information
Founded
Headquarters
Two-Factor Authentication
An extra login step that protects your account even if your password is stolen.
Custodial
The platform holds your crypto on your behalf — you don't control the private keys.
KYC Required
Know Your Customer — you must verify your identity before trading or withdrawing.
Proof of Reserves
The platform publicly proves it holds enough assets to cover all customer funds.
Insurance
Customer funds are covered by insurance in the event of a hack or platform failure.
Supported Chains
About Kraken
Kraken is a US-based cryptocurrency exchange founded in 2011 by Jesse Powell and incorporated as Payward, Inc. Serving clients across 190+ countries, it supports over 300 digital assets tradeable against six fiat currencies, including USD, EUR, and GBP, and offers spot trading, margin trading, staking, and futures. Kraken is one of the longest-running centralized crypto exchanges, and in 2025 relocated its global headquarters to Cheyenne, Wyoming, after obtaining a Special Purpose Depository Institution bank charter.
Security
- Custodial exchange: Kraken holds customer assets on behalf of users
- Approximately 95% of customer funds held in offline cold storage; roughly 5% kept in hot wallets for liquidity
- Quarterly proof-of-reserves audits use Merkle tree cryptographic verification, allowing users to confirm their balances are backed 1:1
- Security features include two-factor authentication, a global settings lock, master key, PGP-encrypted email communications, and a bug bounty programme
- No named insurance fund for retail users; customer protection relies on cold storage architecture and proof-of-reserves transparency
Regulation
- Registered with FinCEN as a Money Services Business and holds a Wyoming SPDI bank charter (US)
- FCA-registered cryptoasset firm and electronic money institution (UK)
- MiCA-registered crypto asset service provider via the Central Bank of Ireland (EU)
- Holds an SEC broker-dealer licence and CFTC FCM licence (acquired via NinjaTrader, 2025)
- AUSTRAC-registered digital currency exchange (Australia)
- Settled with the CFTC in 2021 ($1.25M) for unregistered leveraged trading, OFAC in 2022 ($362K) for sanctions violations, and the SEC in 2023 ($30M) over unregistered staking services
- A subsequent SEC lawsuit filed in late 2023 was dismissed in March 2025 with no penalty
- Does not hold a New York BitLicense; New York state residents are ineligible
Incident History
- June 2024: A zero-day vulnerability in Kraken's deposit system was exploited by a blockchain security firm under the guise of responsible disclosure, allowing approximately $3 million to be withdrawn from Kraken's treasury — not customer funds. The vulnerability was patched within 47 minutes; funds were eventually recovered and redistributed to affected users.
- No customer fund losses from an external security breach have been recorded since launch in 2011.
Security & Score
Platform Safety Score
Based on incident history, security features, and track record
Security Features
Regulatory Information
Regulated In
Jurisdictions where this platform is officially licensed and subject to financial oversight.
Area Served
Countries or regions where this platform is available to users.
Notes
Registered with FinCEN. Settled with CFTC in 2021 over unregistered commodity trading. Does not hold NY BitLicense — New York residents are ineligible.
Incident History
CertiK Security Researcher Exploit
June 19, 2024
A security researcher from CertiK exploited a critical bug to extract approximately $3 million from Kraken's treasury. The funds were later returned after public dispute.
Flash Crash Trading Incident
May 12, 2022
A flash crash on Kraken's LUNA/EUR pair saw prices drop 99% momentarily, triggering forced liquidations for leveraged traders.
Frequently Asked Questions
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