Kraken

Is Kraken safe?

Kraken is the large exchange with the best track record on the thing that matters most: it has not lost customer money to hackers since it opened in 2011. It also pioneered the most useful kind of proof of reservesProof of reservesA report in which a crypto exchange shows that it holds enough coins to cover all customer balances, ideally checked by an outside firm.More in the glossary, one that counts liabilities and lets you check your own balance. We score it 84/100, among the highest of the exchanges we cover, level with eToro and behind Swissquote, a Swiss bank, Bullish and Fidelity Crypto.

Two things hold it back from an A. It is private, so you cannot read audited accounts the way you can for Coinbase, and it has paid regulators in the US and Australia over products and sanctions controls.

Fifteen years without a customer-fund hack

For an exchange founded in the Mt. Gox era, that record is rare. Bitstamp, Bitfinex, KuCoin, Binance and Bybit have all lost money to attackers at some point. Kraken's own security team has a long public research record, including work on hardware-wallet attacks.

The one incident worth knowing came in June 2024. A researcher reported a bug that let deposits be credited without completing. It turned out to be staff of CertiK, a blockchain security firm, who had used the flaw to withdraw about $3 million from Kraken's treasury before reporting it. After a public dispute the funds were returned. No client balances were touched.

What the proof of reserves shows

Kraken runs what it calls an audited proof of reservesProof of reservesA report in which a crypto exchange shows that it holds enough coins to cover all customer balances, ideally checked by an outside firm.More in the glossary, done at a regular cadence by an independent third-party accountant. The latest review covered six assets: bitcoin, ether, solana, USDC, tether and XRP. Three parts make it more useful than most:

• The accountant sums all client balances, so liabilities are included rather than only showing wallet holdings.
• Kraken signs messages from its wallets to prove control of the addresses counted.
• A Merkle treeMerkle treeA way to combine many records into one short code, so that each person can check their own record is included without seeing anyone else's.More in the glossary lets each client confirm their own balance was in the total.

The snapshot dated 30 June 2026 showed reserve ratios of 102.9% for bitcoin and 100.5% for ether. Kraken's own page is frank about the limits: proof of reserves cannot detect hidden debts or show that funds were not borrowed for the snapshot. Negative margin balances are also left out. That is why we score it 85, not 95. A full audit of the company's balance sheet would say more, and that should come if the planned IPO goes ahead.

Licences: strong, with one big gap

Region	Status
EU	MiCAMiCAThe EU's Markets in Crypto-Assets Regulation, which requires crypto exchanges and other providers to be licensed and supervised.More in the glossary licence from the Central Bank of Ireland (June 2025)
UK	FCA cryptoasset registration and e-moneyE-moneyMoney held as a stored balance with a payment firm rather than as a bank deposit. It is safeguarded, not covered by deposit insurance.More in the glossary licence
US	Money transmitter licences in most states; Wyoming SPDI bank charter (Kraken Financial)
New York	Not licensed, not available
Australia	Registered with AUSTRAC; operating entity Bit Trade
Japan	Left the market in 2023

The New York gap matters because NYDFS is the toughest crypto supervisor in the US.

Penalties

None of Kraken's cases involves stolen or missing client money, but there are several:

• 2021: $1.25 million to the CFTC over margin trading offered to US retail clients.
• 2022: $362,158.70 to the US Treasury's OFAC for letting users in Iran trade.
• 2023: $30 million to the SEC to settle charges over its US staking programme, which it shut down. A wider SEC lawsuit filed in November 2023 was dismissed in March 2025.
• 2024: an A$8 million penalty in Australia's Federal Court after ASIC showed Bit Trade sold a margin product to more than 1,100 customers without the required target market rules. Customers lost more than A$7.85 million.

How to protect a Kraken account

1. Set a passkeyPasskeyA way to sign in without a password. Your device holds a key tied to one website or app and unlocks it with your fingerprint, face or PIN.More in the glossary or hardware security key for sign-in and use an authenticator app, not SMS, for withdrawals.
2. Turn on the Global Settings Lock, which blocks changes to security settings for a period you choose, so a thief who gets in cannot quickly remove your protections.
3. Use withdrawal address allowlisting and keep the confirmation emails on.
4. Do not keep large holdings on any exchange, including this one. Kraken's record is good, but an exchange balance is still a claim on a company.

How we scored it

Security history (92) is Kraken's strongest factor and joint best in the category with Fidelity Crypto. Legal record (70) is the weakest, because of the SEC, OFAC, CFTC and ASIC penalties. Reserves (85) would rise with audited public accounts. If you want a European exchange with a similar profile, compare Bitstamp.