Is Kraken a Safe Method of Crypto Storage?

by Jake Wengroff

Launched just two years after Bitcoin itself, Kraken is considered one of the more established crypto exchanges on the market, offering almost 70 cryptocurrencies. Kraken is known for superior security, and with a wide range of cryptocurrencies available, that makes it a good choice for beginners. Read on to learn what sets Kraken apart, and why it’s one of the safest methods to store crypto assets.

A Look at Crypto Storage

In a standard crypto wallet, used to store an investor’s Bitcoin or other digital currencies, the security features are built to keep assets safe from cybercriminals attempting to steal them. However, Kraken is not simply a secure crypto wallet. Kraken is primarily used as an exchange, where investors go to buy, sell and trade crypto, often several times a day.

As such, Kraken is known as an exchange-wallet, and so the security features need to do double duty. Kraken provides security for customers’ static assets, such as when crypto is stored, and also focuses on ensuring that customers’ trading activities are protected against fraudsters and other types of scammers.

Exchange First, with Wallet Integration

Though Kraken is primarily used as an exchange to buy, sell and trade crypto, the company’s wallet service, integrated with the trading platform, provides additional benefits for more active crypto investors.

Built-in exchange functionality means that investors are able to trade cryptocurrencies whenever they wish. They would not need to wait for assets to be transferred from the wallet to the exchange, and vice versa. This is significant for more advanced crypto traders, where, literally, every second counts.

For a quick crypto purchase, Kraken might not offer the best pricing. As a comparison, the Binance.US platform only charges 0.5% for this kind of trading, compared to about 2% for Kraken’s Instant Buy interface. However, more advanced traders can take advantage of Kraken’s “staking” options, where they can loan out their coins for rewards, in addition to fees that lower as trading volume increases.

Additional Unique Security Features

Perhaps one of the most unique features of Kraken’s security stack is that 95% of all deposits are kept in offline, air-gapped, geographically distributed cold storage. Kraken claims on its website that the company keeps full reserves so that investors can always withdraw immediately on demand.

“Our mission is to increase cryptocurrency adoption worldwide, and we recognize that this extends past Kraken’s products and services,” notes the company on its security webpage. “We’re committed to helping the entire industry become more secure, and that means identifying vulnerabilities in other projects or tools that our clients regularly use.”

Store and Trade Crypto Assets with Peace of Mind

Wallets and exchanges, no matter how secure, are still vulnerable to attack. Kraken, even with its advanced security measures in place and integrated wallet and exchange features, is still subject to fraud, misuse or compromise.

“All investors should tread cautiously with even simple crypto trading on Kraken or any other platform,” notes Forbes Advisor. So while Kraken has a good track record, it is important for investors to understand that there will always be some element of risk when using an exchange.

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Jake Wengroff writes about technology and financial services. A former technology reporter for CBS Radio, Jake covers such topics as security, mobility, e-commerce and the Internet of Things.

Sources – Security – Kraken Wallet Review

Forbes Advisor – Kraken Review 2021