Is Kraken Legal in US? 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 US. However, questions remain regarding its safety and legal status within the US. 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 US and if it's safe to use for trading.
Is Kraken legal in US? 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
Crypto regulations in the U.S.
Cryptocurrency trading in the United States is regulated by various federal agencies, including the Securities and Exchange Commission (SEC) and the Commodity Futures Trading Commission (CFTC). Additionally, certain states may have their own regulatory frameworks governing cryptocurrency activities, adding an extra layer of oversight to ensure compliance with applicable laws.
Crypto investor protection in the U.S.
Regulations enforced by the SEC and CFTC aim to protect investors participating in cryptocurrency trading activities. These regulations focus on enhancing market transparency, preventing fraudulent activities, and ensuring fair trading practices. Moreover, investor education initiatives and disclosure requirements contribute to empowering investors and mitigating risks associated with cryptocurrency investments.
Crypto tax in the U.S.
Profits generated from cryptocurrency trading are subject to taxation in the United States. The Internal Revenue Service (IRS) treats cryptocurrencies as property for tax purposes, meaning that capital gains received from cryptocurrency transactions are taxable. Tax rates on capital gains vary depending on several factors, including the individual's income level and the duration of holding the assets. Additionally, tax reporting requirements ensure compliance with tax laws and facilitate accurate tax calculations for cryptocurrency traders.
Do I recommend using Kraken in the US?
The Kraken cryptocurrency exchange can be chosen by clients from US, although there are certain nuances. The exchange does not have a financial license, but that is rather because the financial regulator of US 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 US?
The fact that a crypto exchange does not have a license doesn’t mean that traders from US 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.