Is Kraken Legal in Canada? Is Kraken Safe?
Choosing a trustworthy cryptocurrency exchange is crucial as it directly impacts the safety and security of your digital assets. The high risk of scams in this area necessitates extreme caution from users.
Our analysts have noticed a growing interest in Kraken services among users in the Canada. However, questions remain regarding its safety and legal status within the Canada. Traders Union experts have addressed this concern by crafting a detailed review that explores both the pros and cons of using Kraken.
So, let us tell you if Kraken is allowed in the Canada and if it's safe to use for trading.
Is Kraken legal in Canada? Does it have a license?
Kraken is a regulated exchange that provides services in most countries worldwide, except for those under international sanctions, such as North Korea, Iran, Syria, Cuba, and regions like Crimea, Donetsk, and Luhansk. Restrictions may also apply based on requests from local regulators. We compared Kraken's level of regulation with the top two global competitors and the top two competitors available in your country. Exchanges with Tier-1 regulation are generally considered the safest. However, Kraken's safety level is also influenced by other factors outlined below.
| Kraken | Bybit | MEXC | |
|---|---|---|---|
Government-regulated |
Yes |
Yes |
No |
Tier-1 regulation |
Yes |
Yes |
No |
U.S regulation |
Yes |
No |
No |
FCA U.K |
Yes |
No |
No |
AUSTRAC in Australia |
Yes |
No |
No |
DFSA in UAE |
No |
No |
No |
AMF in France |
Yes |
No |
No |
Spain |
Yes |
No |
No |
Germany |
Yes |
No |
No |
Singapore |
No |
No |
No |
MFSA in Malta |
No |
No |
No |
Seychelles |
No |
Yes |
No |
Other countries |
Belgium, Cyprus, Italy, Poland, Netherlands, Canada, Bermuda |
Austria’s Financial Market Authority (FMA), Georgia, Kazakhstan |
|
Open an account |
|
|
|
Other Kraken Security Factors to Consider
| Kraken | Bybit | MEXC | |
|---|---|---|---|
2FA |
Yes |
Yes |
Yes |
Verification (KYC) |
Yes |
Yes |
Yes |
Successful hacks |
No |
Yes |
No |
Cold wallet storage |
Yes |
Yes |
Yes |
Investor protection fund |
No |
Yes |
No |
Open an account |
|
|
|
Short summary about the Kraken exchange
The Kraken exchange is a trading platform for Bitcoin, Ethereum, Tether, Cardano, XRP, other cryptocurrencies, and stablecoins. Fiats are represented by EUR, USD, CAD, CHF, AUD, GBP, and JPY. In addition to margin trading, Kraken has indices and futures trading. The exchange provides traders with x5 leverage for margin trading and x50 for futures. Commission fees are among the lowest on the market - up to 0.26%. The crypto exchange has a proprietary trading terminal for an internet browser, as well as mobile applications for iOS and Android devices. The platform offers an extensive knowledge base, tutorials, and video podcasts with news and analytics. The referral program is the standard single-level model with a yield of 20% of the referral’s commission fees.
| 💰 Account currency: | Cryptocurrencies, currencies |
| 🚀 Minimum deposit: | $1 |
| ⚖️ Leverage: | 1:5 for margin trading, 1:50 for futures |
| 💱 Spread: | Market |
| 🔧 Instruments: | Cryptocurrencies, currencies |
| 💹 Margin Call / Stop Out: | No |
Kraken Pros and Cons
👍 Kraken Pros:
•convenient, intuitive terminal with one-click trading;
•all major cryptocurrencies, as well as seven fiats;
•margin trading, as well as futures and indices trading ;
•large leverage (x5 for margin, x50 for futures trading);
•an extensive database of information and training materials;
•large trading volumes on the exchange provide high liquidity;
•some of the lowest fees in the cryptocurrency market.
👎 Kraken Cons:
•no investment programs;
•no call center.
Rules and Regulation
Cryptocurrency Regulation in Canada
Cryptocurrency regulation in Canada is controlled by various regulatory bodies to ensure compliance and protect investors. The primary regulatory authority is the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC), which monitors cryptocurrency exchanges for compliance with anti-money laundering (AML) and know your client (KYC) regulations.
Licensing Demands
Cryptocurrency exchanges that operate in Canada are required to register with FINTRAC and comply with AML/KYC regulations. Additionally, some provinces may require exchanges to obtain additional licenses or registrations, depending on their specific activities.
Investor Protection
Investor protection in the cryptocurrency market is a priority in Canada. The Canadian Securities Administrators (CSA) issues warnings and guidelines to educate investors about the risks associated with cryptocurrency investments. Moreover, the Ombudsman for Banking Services and Investments (OBSI) offers recourse for investors in case of disputes with cryptocurrency service providers.
Taxation
Profits from trading cryptocurrencies are subject to taxation in Canada. The Canada Revenue Agency (CRA) treats cryptocurrencies as commodities for tax purposes. Therefore, capital gains tax applies to cryptocurrency transactions, and traders are required to report their gains as income. Tax rates depend on various factors, including the individual's income bracket and the frequency of trading.
Do I recommend using Kraken in the Canada?
The Kraken cryptocurrency exchange can be chosen by clients from Canada, although there are certain nuances. The exchange does not have a financial license, but that is rather because the financial regulator of Canada does not issue the licenses to crypto exchanges in general. There have been certain security-related incidents, but those very singular cases. The reputation of the exchange can be considered standard.
FAQ
Can I work with crypto exchanges considering that they don’t have a license in Canada?
The fact that a crypto exchange does not have a license doesn’t mean that traders from Canada will have problems while working with it. Cryptocurrency exchanges are not subject to licensing in many countries, while there are many exchanges with good reputation. Assess the available information about the exchange and check its reputation.
What security methods for account protection do crypto exchanges employ?
Cryptocurrency exchanges may offer various security methods. These include the two-factor authentication, first and foremost, and also such methods as a security question, additional passwords, etc.
Can an exchange that has had a security-related incident in the past be trusted?
You need to check whether such incidents were regular. If it was one episode several years ago, while the reputation of the exchange is good, you can work with such an exchange.
Should I work with an exchange if I have doubts about its reputation?
No. Always choose the cryptocurrency exchanges that have a good reputation.
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Team that worked on the article
Mikhail Vnuchkov joined Traders Union as an author in 2020. He began his professional career as a journalist-observer at a small online financial publication, where he covered global economic events and discussed their impact on the segment of financial investment, including investor income. With five years of experience in finance, Mikhail joined Traders Union team, where he is in charge of forming the pool of latest news for traders, who trade stocks, cryptocurrencies, Forex instruments and fixed income.
Dr. BJ Johnson is a PhD in English Language and an editor with over 15 years of experience. He earned his degree in English Language in the U.S and the UK. In 2020, Dr. Johnson joined the Traders Union team. Since then, he has created over 100 exclusive articles and edited over 300 articles of other authors.