Kraken

From CryptoMarketsWiki
Jump to: navigation, search


Kraken
Kraken.jpg
Founded 2011
Headquarters San Francisco, CA
Key People Jesse Powell, CEO and Founder; Nicholas Percoco, Chief Security Officer
Employees 500-1000
Products Kraken Exchange
Twitter @krakenfx
LinkedIn Profile
Facebook KrakenFX
Website Kraken Exchange Home
Blog Kraken Blog

Kraken is an over-the-counter cryptocurrency exchange founded in 2011. The San Francisco-based exchange offers bitcoin, Ether and other crypto currencies with several fiat currencies including US dollars, Canadian dollars, British pounds, euros, and the Japanese yen.[1][2]

With operations in the US, Canada and Europe, Kraken is recognized as one of the largest bitcoin exchanges globally, although its ranking, based on volume, varies greatly.[3][4]

In 2018, Kraken announced it would be ceasing operations in Japan indefinitely, though it "might consider re-entering the market at a later point."[5]

Background

Kraken was founded in July of 2011. It went into open beta on May 3, 2013, then went live on September 10, 2013. It emerged from a group called Max BTC, which was mining for bitcoins in 2011 and had about five percent of the network at one point, according to Kraken's co-founder Jesse Powell. Powell invested in computer equipment when bitcoin was priced at $1, but quickly exited the mining business and decided to focus on building the exchange.[6][7]

Overview

In February 2014, Kraken was ranked as the number one exchange by volume in trading between bitcoin and euros. It began listing prices on Bloomberg terminals in April 2014.[8]

In March 2014, the exchange raised $5 million in Series A funding. The company raised more money in a deal with SBI Investment in February 2016 and another round of investment from Money Partners Group in April 2016, and grew quickly through a series of strategic acquisitions. Kraken purchased and integrated several other exchanges including Coinsetter, a New York-based exchange with operations in Canada, and another called CleverCoin, a Dutch-based digital currency exchange. It acquired wallet funding service Gildera in December 2016 and rebranded it as Kraken Direct. It bought the charting and trading platform Cryptowatch in March 2017.[9][10][11]

Kraken began offering yen trading in Japan in 2014, but in April 2018, the exchange announced it was exiting the country and suspending operations in Japan for Japanese residents. Before this time, Japanese authorities had allowed the exchange to operate in Japan without a license.[12][13]

In April 2018, Kraken announced it would not comply with New York Attorney General Eric Schneiderman's inquiry into the exchange, which was one of 13 exchanges to have received the request. Kraken's CEO Jesse Powell released a scathing statement about the request, calling the exchange's decision to leave New York in 2015 a "wise decision." Powell expressed frustration with New York's "disrespectful" treatment of cryptocurrency businesses as well as its cryptocurrency regulatory framework, BitLicense.[14] He also described the nature of the demands as requiring a "massive" diversion of resources.[15]

In a post on Kraken's official corporate blog entitled, "Kraken's Position on Regulation," Powell said the publication of the New York Attorney General's request lacked "any prior communication" and that "inclusion of exchanges which are clearly outside of the AG’s jurisdiction (including Kraken) raise questions about the true motive," and "comes off as a publicity stunt."[16]

On April 8, 2019, Bloomberg reported that Kraken had been sued by Jonathan Silverman, the manager of Kraken’s New York sales and trading desk, for compensation due him from employment in New York in 2017, two years after Kraken said it would no longer do business in the state in order to avoid regulation there.[17]

In September 2018, Jesse Powell announced that Kraken had laid off 57 of its North America-based employees, roughly ten percent of its client services team. Despite speculation over social media that the layoffs were due to a security breach, Powell asserted that it was merely a cost-saving measure taken due to low trading volumes and that the layoffs would not affect the quality of Kraken's service. Powell also said that Kraken was "still aggressively hiring in all areas." [18]

Coindesk and other publications reported on December 12, 2018, that Kraken had solicited its "most valued clients" by emailto participate in a potential new equity offering which valued the company at $4 billion. The email, a copy of which was obtained by Coinbase, asserted that Kraken was currently well funded. The purpose of the equity offering was to better align the company's interests with its most valued clients and to establish a "war chest for acquisitions."[19]

On January 15, 2019, Powell made a public statement over Twitter urging users not to store their cryptocurrency on any exchange, including Kraken. He recommended using wallet hardware by Ledger or Trezor instead.[20][21]

Law enforcement requests triple

Over the course of 2018, requests from Kraken users for law enforcement intervention increased 300 percent from its 2017 statistics. 66 percent of the requests came from U.S. users, while the U.K., Germany, and France took up the majority of the rest. Many of the U.S. requests came from Homeland Security Investigations (HSI) and the Drug Enforcement Administration (DEA). Representatives from Kraken said that the "cost of handling subpoenas is quickly becoming a barrier to entry."[22]

ICO Rating Security Report

In January 2019 the independent crypto markets analysis firm ICO Rating ranked 135 of the world's most popular cryptocurrency exchanges. Kraken was ranked at #1, just above Cobinhood, with a solid "A" score. Cobinhood was the only other exchange to receive an "A" rating; no exchanges earned an "A+."[23]

Crypto Facilities

In what Kraken called a purchase for "nine figures" on February 4, 2019, the company acquired U.K.-based Crypto Facilities. Crypto Facilities offers trading in cryptocurrency pairs as well as leveraged contracts, which it characterizes as "futures." Crypto Facilities also provides data and index services to the CME Group, Inc. in connection with the CME's bitcoin futures contract and its Ether index.[24] In an indication that the deal had been underway for some time, Powell told Fortune that the companies had already integrated their back-end operations of Crypto Facilities allowing customers of both companies to trade on a single platform. The transaction was approved by the Crypto Facilities' regulator, the U.K. Financial Conduct Authority. Powell also said that the purchase had been funded from Kraken's own resources.[25]

In March, Crypto Facilities reported to Cointelegraph that its trading volumes increased by 500 percent after being acquired by Kraken.[26]

Products and Services

Kraken offers trading in bitcoin, Ether, Augur, Bitcoin Cash, Bitcoin SV, Cardano, Dogecoin, EOS, Ethereum Classic, Monero, Qtum, XRP, Tether, Tezos, Zcash, Dash, Litecoin and several others against the US dollar, Canadian dollar, euro, Japanese yen and British pound.[27][28]

Kraken Futures

Following the Crypto Facilities acquisition, Kraken renamed the firm "Kraken Futures." Kraken announced on March 25, 2019 that customers of its platform would be able to engage in both spot and futures trading. It also said Kraken users will be able to trade these contracts leveraged up to 50x, giving them the ability to profit in both bull and bear markets.[29][30]

Security

In March 2019, Kraken announced on its blog that it had appointed a new chief security officer, Nicholas Percoco. Kraken also announced that it would be requiring its users to sign in using two-factor authentication for added security, and that it had formed Kraken Security Labs, which would focus on improving the security of its own products and the "entire cryptocurrency ecosystem" by performing research on third-party products like wallets.[31]

De-listing Bitcoin Cash SV

In April 2019, Craig Wright began arguing with a Twitter user called "Hodlnaut," a bitcoin user who became known for the "Lightning Torch" experiment, which was a promotional demonstration of the Lightning Network's capabilities. After achieving a large Twitter following, Hodlnaut made public posts criticizing Wright, who later sent Hodlnaut a letter accusing the Twitter user of being a "fraud," and threatening legal action. This triggered a huge wave of support for Hodlnaut, as well as renewed hate for Wright, from thousands of Twitter users.[32]

Binance and ShapeShift later announced they would be de-listing Bitcoin Cash SV from their exchanges. Kraken later announced that it would be doing the same, citing "community sentiment" around Bitcoin Cash SV as their primary reason for doing so. According to the announcement, Kraken planned on disabling BCHSV deposits on April 22, cease trading pairs on April 29, and stop withdrawals of BCHSV May 31. The BCHSV community responded with ire. Ed Pownall, a PR representative of Calvin Ayre, founder of CoinGeek.com and one of SV's biggest supporters, accused these exchanges of "market manipulation" and "playing God," and that delisting BCHSV sets "a dangerous precedent."[33][34]

Key People

  • Jesse Powell - CEO and Founder
  • Nicholas Percoco - Chief Security Officer

References

  1. About Us. Kraken.
  2. Kraken Launches Bitcoin-Yen Trading in Japan. Kraken.
  3. Reports Indicate Kraken’s Trading Engine Can Mess Up During Periods of High Trading Volume. The Merkle.
  4. One of the Biggest Crypto Exchanges Goes Dark and Users Are Getting Nervous. Bloomberg Technology.
  5. Bitcoin exchange Kraken plans to pull out of Japan. Business Insider.
  6. Kraken CEO Jesse Powell about being the largest Bitcoin exchange. The Bitcoin Knowledge Podcast.
  7. Kraken: About Us. Kraken.
  8. #1 Euro Volume. Press Release.
  9. Kraken Acquires Dutch Bitcoin Exchange CleverCoin. Coindesk.
  10. Kraken Acquires Cryptowatch and Launches New Trade Platform. Coindesk.
  11. Bitcoin Exchange Kraken Acquires Coinsetter, Launches US Trading. Coindesk.
  12. Bitcoin Exchange Kraken Launches in Japan. Coindesk.
  13. Cryptocurrency Exchange Kraken Pulls Out of Japan. Bloomberg.
  14. Kraken CEO: Crypto Exchange Won't Answer New York AG's Inquiry. Coindesk.
  15. Kraken cryptocurrency exchange says it will not comply with New York inquiry. CNBC.
  16. Kraken’s Position on Regulation. Kraken.
  17. Bitcoin Exchange Kraken Sued by Former Trading Desk Manager. Bloomberg.
  18. Kraken FAQ. Bloomberg.
  19. Kraken Is Seeking ‘War Chest’ Investment at a $4 Billion Valuation. Coindesk.
  20. Please Do Not Store Crypto on Any Exchange, Warns CEO of Major Crypto Exchange Kraken. CCN.
  21. Jesse Powell: PLEASE do not store more coins on an exchange (including @krakenfx) than you need to actively trade.... Twitter.
  22. Kraken law enforcement requests tripled in 2018. The Block Crypto.
  23. Exchange Security Report V 2.0 Update. ICO Rating.
  24. Kraken Acquires Futures Startup In Deal Worth At Least $100 Million. Coin Desk.
  25. Crypto Exchange Kraken Raises $100 Million, Acquires London Futures Firm. Fortune.
  26. Crypto Futures Provider Volumes Increase 500 Percent After Acquisition by Kraken. Cointelegraph.
  27. Digital assets and cryptocurrencies available on Kraken (and their symbols). Kraken.
  28. Fiat currencies available on Kraken. Kraken.
  29. Kraken Exchange Announces Launch of Both Spot and Futures Trading. Bitcoin Exchange Guide.
  30. Kraken Futures is a new way to trade. Kraken Blog.
  31. A letter from Kraken’s Chief Security Officer – Nick Percoco. Kraken Blog.
  32. Craig Wright’s Fight With a Cartoon Bitcoin Astronaut Cat Explained. Coindesk.
  33. Binance Delists BCHSV, CEO Calls Craig Wright “a Fraud”. Finance Magnates.
  34. Kraken Exchange Joins Binance, ShapeShift in Delisting Bitcoin SV. Coindesk.