Difference between revisions of "Kraken"

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{{Infobox_Company  <!-- Feel free to remove comments like this when you add real info -->
 
{{Infobox_Company  <!-- Feel free to remove comments like this when you add real info -->
 
| company_name = Kraken
 
| company_name = Kraken
| company_logo =  <!-- use the syntax: [[Image:imgname.jpg]] for this, or leave it blank -->
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| company_logo =  [[Image:kraken.jpg{{!}}200px]]
| key_people =    [[Jesse Powell]]
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| key_people =    [[Jesse Powell]], CEO and Founder; Nicholas Percoco, Chief Security Officer
 
| foundation =    2011
 
| foundation =    2011
 
| location =      San Francisco, CA
 
| location =      San Francisco, CA
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| linkedin =      https://www.linkedin.com/company/kraken-exchange/
 
| linkedin =      https://www.linkedin.com/company/kraken-exchange/
 
| stocktwits =    <!-- StockTwits ID for the company, e.g. JohnLothian, or leave blank -->
 
| stocktwits =    <!-- StockTwits ID for the company, e.g. JohnLothian, or leave blank -->
| facebook =      https://www.facebook.com/KrakenFX/
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| facebook =      KrakenFX
| homepage =      https://www.kraken.com/en-us/about
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| homepage =      [https://www.kraken.com/en-us/about Kraken Exchange Home]
 
| press =          <!-- A link to where press releases can be found, or leave blank to omit -->
 
| press =          <!-- A link to where press releases can be found, or leave blank to omit -->
| blog  =          https://blog.kraken.com/
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| blog  =          [https://blog.kraken.com/ Kraken Blog]
 
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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.<ref>{{cite web|url=https://www.kraken.com/en-us/about|name=About Us|org=Kraken|date=April 17, 2018}}</ref><ref>{{cite web|url=https://blog.kraken.com/post/269/kraken-launches-bitcoin-yen-trading-in-japan/|name=Kraken Launches Bitcoin-Yen Trading in Japan|org=Kraken|date=April 30, 2018}}</ref>  
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Kraken is an over-the-counter [[cryptocurrency]] exchange founded in 2011. The San Francisco-based exchange offers [[bitcoin]], [[Ether]] and other cryptocurrencies with several fiat currencies including US dollars, Canadian dollars, British pounds, euros, and the Japanese yen.<ref>{{cite web|url=https://www.kraken.com/en-us/about|name=About Us|org=Kraken|date=April 17, 2018}}</ref><ref>{{cite web|url=https://blog.kraken.com/post/269/kraken-launches-bitcoin-yen-trading-in-japan/|name=Kraken Launches Bitcoin-Yen Trading in Japan|org=Kraken|date=April 30, 2018}}</ref>  
  
The exchange, with operations in the US, Canada and Europe, is recognized as one of the largest bitcoin exchanges globally,<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-01-12/crypto-exchange-kraken-goes-dark-and-user-anxiety-surges|name=One of the Biggest Crypto Exchanges Goes Dark and Users Are Getting Nervous|org=Bloomberg Technology|date=April 30, 2018}}</ref> although its ranking, based on volume, varies greatly.<ref>{{cite web|url=https://themerkle.com/reports-indicate-krakens-trading-engine-can-mess-up-during-periods-of-high-trading-volume/|name=Reports Indicate Kraken’s Trading Engine Can Mess Up During Periods of High Trading Volume|org=The Merkle|date=April 30, 2018}}</ref>
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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.<ref>{{cite web|url=https://themerkle.com/reports-indicate-krakens-trading-engine-can-mess-up-during-periods-of-high-trading-volume/|name=Reports Indicate Kraken’s Trading Engine Can Mess Up During Periods of High Trading Volume|org=The Merkle|date=April 30, 2018}}</ref><ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-01-12/crypto-exchange-kraken-goes-dark-and-user-anxiety-surges|name=One of the Biggest Crypto Exchanges Goes Dark and Users Are Getting Nervous|org=Bloomberg Technology|date=April 30, 2018}}</ref>
  
In 2018, Kraken announced it would be ceasing operations in Japan indefinitely, though it "might consider re-entering the market at a later point."<ref>{{cite web|url=http://www.businessinsider.com/bitcoin-exchange-kraken-plans-to-pull-out-of-japan-2018-4|name=Bitcoin exchange Kraken plans to pull out of Japan|org=Business Insider|date=April 30, 2018}}</ref>
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In 2018, Kraken announced it would cease operations in Japan indefinitely, though it "might consider re-entering the market at a later point."<ref>{{cite web|url=http://www.businessinsider.com/bitcoin-exchange-kraken-plans-to-pull-out-of-japan-2018-4|name=Bitcoin exchange Kraken plans to pull out of Japan|org=Business Insider|date=April 30, 2018}}</ref>
  
== History ==
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== 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.<ref>{{cite web|url=http://www.bitcoin.kn/2016/04/kraken-ceo-jesse-powell-largest-bitcoin-exchange/|name=Kraken CEO Jesse Powell about being the largest Bitcoin exchange|org=The Bitcoin Knowledge Podcast|date=April 17, 2018}}</ref><ref>{{cite web|url=https://www.kraken.com/en-us/about|name=Kraken: About Us|org=Kraken|date=April 30, 2018}}</ref>
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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.<ref>{{cite web|url=http://www.bitcoin.kn/2016/04/kraken-ceo-jesse-powell-largest-bitcoin-exchange/|name=Kraken CEO Jesse Powell about being the largest Bitcoin exchange|org=The Bitcoin Knowledge Podcast|date=April 17, 2018}}</ref><ref>{{cite web|url=https://www.kraken.com/en-us/about|name=Kraken: About Us|org=Kraken|date=April 30, 2018}}</ref>
  
By February 2014, it 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.<ref>{{cite web|url=https://blog.kraken.com/post/301/1-euro-volume/|name=#1 Euro Volume|org=Press Release|date=April 17, 2018}}</ref>
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== Overview ==
  
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 charting and trading platform Cryptowatch in March 2017.<ref>{{cite web|url=https://www.coindesk.com/kraken-bitcoin-acquisition-clevercoin/|name=Kraken Acquires Dutch Bitcoin Exchange CleverCoin|org=Coindesk|date=April 17, 2018}}</ref><ref>{{cite web|url=https://blog.kraken.com/post/211/|name=Kraken Acquires Cryptowatch and Launches New Trade Platform|org=Coindesk|date=April 17, 2018}}</ref><ref>{{cite web|url=https://www.coindesk.com/bitcoin-kraken-coinsetter-acquired/|name=Bitcoin Exchange Kraken Acquires Coinsetter, Launches US Trading|org=Coindesk|date=April 17, 2018}}</ref>
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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.<ref>{{cite web|url=https://blog.kraken.com/post/301/1-euro-volume/|name=#1 Euro Volume|org=Press Release|date=April 17, 2018}}</ref>
  
In 2014, Kraken began offering yen trading in Japan.<ref>{{cite web|url=https://www.coindesk.com/bitcoin-exchange-kraken-launches-japan/|name=Bitcoin Exchange Kraken Launches in Japan|org=Coindesk|date=April 30, 2018}}</ref> In April 2018, the exchange announced it was exiting the country and suspending operations in Japan for Japanese residents. Before this time, it had been allowed by Japanese authorities to operate in Japan without a license.<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-04-17/cryptocurrency-exchange-kraken-pulls-out-of-japan-citing-costs|name=Cryptocurrency Exchange Kraken Pulls Out of Japan|org=Bloomberg|date=April 17, 2018}}</ref>
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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.<ref>{{cite web|url=https://www.coindesk.com/kraken-bitcoin-acquisition-clevercoin/|name=Kraken Acquires Dutch Bitcoin Exchange CleverCoin|org=Coindesk|date=April 17, 2018}}</ref><ref>{{cite web|url=https://blog.kraken.com/post/211/|name=Kraken Acquires Cryptowatch and Launches New Trade Platform|org=Coindesk|date=April 17, 2018}}</ref><ref>{{cite web|url=https://www.coindesk.com/bitcoin-kraken-coinsetter-acquired/|name=Bitcoin Exchange Kraken Acquires Coinsetter, Launches US Trading|org=Coindesk|date=April 17, 2018}}</ref>
  
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. CEO Jesse Powell released a scathing statement about the request, citing Kraken's decision to leave New York in 2015 as a "wise decision." Powell expressed frustration with New York's "disrespectful" treatment of cryptocurrency businesses, as well as its cryptocurrency regulatory framework, [[BitLicense]].<ref>{{cite web|url=https://www.coindesk.com/kraken-ceo-crypto-exchange-wont-comply-with-new-york-inquiry/|name=Kraken CEO: Crypto Exchange Won't Answer New York AG's Inquiry|org=Coindesk|date=April 30, 2018}}</ref> He also described the nature of the demands as requiring a "massive" diversion of resources.<ref>{{cite web|url=https://www.cnbc.com/2018/04/19/kraken-cryptocurrency-exchange-says-it-will-not-comply-with-new-york-inquiry.html|name=Kraken cryptocurrency exchange says it will not comply with New York inquiry|org=CNBC|date=April 30, 2018}}</ref>
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Kraken began offering yen trading against bitcoin 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.<ref>{{cite web|url=https://www.coindesk.com/bitcoin-exchange-kraken-launches-japan/|name=Bitcoin Exchange Kraken Launches in Japan|org=Coindesk|date=April 30, 2018}}</ref><ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-04-17/cryptocurrency-exchange-kraken-pulls-out-of-japan-citing-costs|name=Cryptocurrency Exchange Kraken Pulls Out of Japan|org=Bloomberg|date=April 17, 2018}}</ref>
  
In a post on Kraken's official corporate blog entitled, "Kraken's Position on Regulation," Powell said that 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."<ref>{{cite web|url=https://blog.kraken.com/post/1561/krakens-position-on-regulation/|name=Kraken’s Position on Regulation|org=Kraken|date=April 30, 2018}}</ref>
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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]].<ref>{{cite web|url=https://www.coindesk.com/kraken-ceo-crypto-exchange-wont-comply-with-new-york-inquiry/|name=Kraken CEO: Crypto Exchange Won't Answer New York AG's Inquiry|org=Coindesk|date=April 30, 2018}}</ref> He also described the nature of the demands as requiring a "massive" diversion of resources.<ref>{{cite web|url=https://www.cnbc.com/2018/04/19/kraken-cryptocurrency-exchange-says-it-will-not-comply-with-new-york-inquiry.html|name=Kraken cryptocurrency exchange says it will not comply with New York inquiry|org=CNBC|date=April 30, 2018}}</ref>
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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."<ref>{{cite web|url=https://blog.kraken.com/post/1561/krakens-position-on-regulation/|name=Kraken’s Position on Regulation|org=Kraken|date=April 30, 2018}}</ref>
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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.<ref>{{cite web|url=https://www.bloomberg.com/news/articles/2019-04-07/crypto-exchange-kraken-sued-by-former-trading-desk-manager?srnd=premium-europe|name=Bitcoin Exchange Kraken Sued by Former Trading Desk Manager|org=Bloomberg|date=April 8< 2019}}</ref> 
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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." <ref>{{cite web|url=https://www.bloomberg.com/news/articles/2018-09-06/crypto-exchange-kraken-reduces-staff-amid-digital-downturn|name=Kraken FAQ|org=Bloomberg|date=September 7, 2018}}</ref>
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Coindesk and other publications reported on December 12, 2018, that Kraken had solicited its "most valued clients" by email to 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."<ref>{{cite web|url=https://www.coindesk.com/kraken-is-seeking-war-chest-investment-at-a-4-billion-valuation|name=Kraken Is Seeking ‘War Chest’ Investment at a $4 Billion Valuation|org=Coindesk|date=December 13, 2018}}</ref>
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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.<ref>{{cite web|url=https://www.ccn.com/please-do-not-store-crypto-on-any-exchange-warns-ceo-of-major-crypto-exchange-kraken/|name=Please Do Not Store Crypto on Any Exchange, Warns CEO of Major Crypto Exchange Kraken|org=CCN|date=January 18, 2019}}</ref><ref>{{cite web|url=https://twitter.com/jespow/status/1085348666699739141|name=Jesse Powell: PLEASE do not store more coins on an exchange (including @krakenfx) than you need to actively trade...|org=Twitter|date=January 18, 2019}}</ref>
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Kraken valued itself at $4 billion in June 2019 when it raised $13.5 million from 2,263 accredited investors on the online investment platform BnkToTheFuture. In the deal, the investors bought shares in an illiquid special purpose vehicle which bought equity in Kraken. Kraken was conducting a private placement at the same time.<ref>{{cite web|url=https://www.coindesk.com/over-2000-investors-back-kraken-crypto-exchanges-13-million-crowdfunding?utm_source=twitter&utm_medium=coindesk&utm_term=&utm_content=&utm_campaign=Organic|name=Over 2,000 Investors Back Kraken Crypto Exchange’s $13 Million Crowdfunding|org=CoinDesk|date=June 25, 2019}}</ref>
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In July 2019, former [[B2C2]] managing director Kevin Beardsley joined Kraken Futures to help develop the business for European customers.<ref>{{cite web|url=https://www.theblockcrypto.com/2019/07/24/kraken-futures-snags-a-former-otc-trader-to-attract-big-investors-with-handsome-rebates/?utm_source=newsletter&utm_medium=email&utm_campaign=2019-07-24|name=Kraken Futures snags a former OTC trader to attract big investors with enticing rebates|org=The Block|date=July 26, 2019}}</ref>
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On July 31, 2019, Kraken announced that Etana Custody would now allow Kraken customers to transact in U.S. dollars, euros, Canadian dollars, British pounds, and Japanese yen worldwide. Users need to create an Etana Custody Wallet to do so.<ref>{{cite web|url=https://www.coindesk.com/kraken-to-enable-worldwide-fiat-funding-options|name=Kraken to Enable Worldwide Fiat Funding Options|org=CoinDesk|date=August 1, 2019}}</ref> 
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=== Law enforcement requests ===
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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."<ref>{{cite web|url=https://www.theblockcrypto.com/tiny/kraken-received-nearly-3-times-more-law-enforcement-requests-in-2018-than-in-2017/|name=Kraken law enforcement requests tripled in 2018|org=The Block Crypto|date=January 14, 2019}}</ref> Kraken reported in January 2020 that the growth in regulatory requests had slowed in 2019 to a year-on-year increase of about 50% to 710 requests. The share of requests coming from U.S. authorities had declined to about 62% of the total number of requests.<ref>{{cite web|url=https://www.coindesk.com/law-enforcement-data-requests-rose-by-almost-50-in-2019-says-kraken?utm_source=&utm_medium=&utm_campaign=clid="name=Law Enforcement Data Requests Rose by Almost 50 Percent in 2019, Says Kraken|org=CoinDesk|date=January 7, 2019}}</ref>
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=== ICO Rating's security report ===
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In January 2019 the independent cryptocurrency markets analysis firm ICO Rating ranked 135 of the world's most popular cryptocurrency exchanges according to their security. 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+."<ref>{{cite web|url=https://icorating.com/report/exchange-security-report-v-20-update/|name=Exchange Security Report V 2.0 Update|org=ICO Rating|date=January 18, 2019}}</ref>
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=== Crypto Facilities acquisition===
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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.<ref>{{cite web|url=https://www.coindesk.com/crypto-kraken-acquires-crypto-facilities|name=Kraken Acquires Futures Startup In Deal Worth At Least $100 Million|org=Coin Desk|date=February 4, 2010}}</ref> 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.<ref>{{cite web|url=http://fortune.com/2019/02/04/kraken-crypto-facilities-jesse-powell/|name=Crypto Exchange Kraken Raises $100 Million, Acquires London Futures Firm|org=Fortune|date=February 4, 2019}}</ref>
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In March 2019, Crypto Facilities told Cointelegraph that its trading volumes increased by 500 percent after being acquired by Kraken.<ref>{{cite web|url=https://cointelegraph.com/news/crypto-futures-provider-volumes-increase-500-percent-after-acquisition-by-kraken|name=Crypto Futures Provider Volumes Increase 500 Percent After Acquisition by Kraken|org=Cointelegraph|date=March 6, 2019}}</ref>
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=== Lawsuit ===
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In late November 2019 Nathan Runyon, a former employee of Kraken, filed a lawsuit against the company. According to the lawsuit, Runyon was asked to falsify exchange data to help the company pass audits, as well as ignore surreptitious changes in stock option grant vesting schedules that took place after the schedules had been posted in board meeting minutes. Though he attempted to bring these discrepancies to the attention of his superiors, the lawsuit says that Runyon was told to ignore them. Runyon also alleges that Kraken profited illegally from sanctioned parties on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List; the lawsuit says that he attempted to address this "multiple times," but was ignored and faced repeated instances of workplace harassment, discrimination, and ultimately undue termination as a result. The lawsuit also includes other damning allegations not related specifically to the charges; it says that while training under an unnamed Kraken employee, he was asked by that employee to clarify basic financial concepts, such as, "what causes the price of bitcoin to go up and down (market supply/demand)" and, "who owns the blockchain." Runyon is seeking restitution for damages related to harassment at work, discrimination and breach of contract.<ref>{{cite web|url=https://www.coindesk.com/ex-kraken-employee-alleges-unethical-and-illegal-tactics-in-discrimination-lawsuit|name=Ex-Kraken Employee Alleges ‘Unethical and Illegal Tactics’ in Discrimination Lawsuit|org=Coindesk|date=December 18, 2019}}</ref><ref>{{cite web|url=https://www.docdroid.net/rbU65Yu/07071236.pdf#page=3|name=REQUEST FOR PUNITIVE DAMAGES DEMAND FOR JURY TRIAL|org=Runyon v. Payward and NG|date=December 18, 2019}}</ref>
  
 
== Products and Services ==
 
== Products and Services ==
  
Kraken offers trading in [[bitcoin]], [[Ether]], [[Dash]], [[Litecoin]] and several others against US dollar, Canadian dollar, euro, the Japanese yen and the British pound.<ref>{{cite web|url=https://blog.kraken.com/post/888/kraken-adds-usd-gbp-and-eur-funding-options/|name=Kraken adds USD, GBP, and EUR funding options!|org=Kraken|date=April 30, 2018}}</ref><ref>{{cite web|url=https://www.kraken.com/help/faq|name=Kraken FAQ|org=Kraken|date=April 30, 2018}}</ref>
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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, Swiss Franc, and British pound.<ref>{{cite web|url=https://www.financemagnates.com/cryptocurrency/trading/kraken-opens-up-fx-trading-for-crypto-users-except-us-residents/|name=Kraken Opens up FX Trading for Crypto Users, Except US Residents|org=Finance Magnates|date=March 12, 2020}}</ref><ref>{{cite web|url=https://support.kraken.com/hc/en-us/articles/360000382363|name=Fiat currencies available on Kraken|org=Kraken|date=January 18, 2019}}</ref> In January 2020, Kraken listed [[USDC]], a [[stablecoin]] created as a joint venture by [[Circle]] and [[Coinbase]].<ref>{{cite web|url=https://www.coindesk.com/kraken-lists-usdc-the-day-after-binance-drops-it|name=Kraken Lists USDC the Day After Binance Drops It for Some Pairs|org=Coindesk|date=January 8, 2020}}</ref>
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=== Kraken Futures ===
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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.<ref>{{cite web|url=https://bitcoinexchangeguide.com/kraken-exchange-announces-launch-of-both-spot-and-futures-trading/|name=Kraken Exchange Announces Launch of Both Spot and Futures Trading|org=Bitcoin Exchange Guide|date=March 27, 2019}}</ref><ref>{{cite web|url=https://blog.kraken.com/post/2224/kraken-futures-is-a-new-way-to-trade/|name=Kraken Futures is a new way to trade|org=Kraken Blog|date=March 27, 2019}}</ref>
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Kraken futures is not available to U.S. residents.<ref>{{cite web|url=https://blog.kraken.com/post/2086/unlock-futures-trading-with-our-crypto-facilities-acquisition/|name=Unlock futures trading with our Crypto Facilities acquisition!|org=Kraken|date=January 14, 2019}}</ref>
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According to Kevin Beardsley, head of business development at Kraken Futures, the platform provides its traders with rebates of 30 percent of the fees it collects.<ref>{{cite web|url=https://www.theblockcrypto.com/2019/07/24/kraken-futures-snags-a-former-otc-trader-to-attract-big-investors-with-handsome-rebates/?utm_source=newsletter&utm_medium=email&utm_campaign=2019-07-24|name=Kraken Futures snags a former OTC trader to attract big investors with enticing rebates|org=The Block|date=July 26, 2019}}</ref>
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In a November 2019-dated blog post, Kraken announced that it was launching futures market development efforts in Russia including hiring Aleksey Bragin as a representative in the country.<ref>{{cite web|url=https://blog.kraken.com/post/3373/kraken-futures-ramps-up-russian-operations/|name=Kraken Futures Ramps Up Russian Operations|date=January 14, 2019}}</ref>
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=== Cybersecurity Measures ===
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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]].<ref>{{cite web|url=https://blog.kraken.com/post/2214/a-letter-from-krakens-chief-security-officer-nick-percoco/|name=A letter from Kraken’s Chief Security Officer – Nick Percoco|org=Kraken Blog|date=March 28, 2019}}</ref>
 +
 
 +
=== 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.<ref>{{cite web|url=https://www.coindesk.com/craig-wrights-fight-with-a-cartoon-bitcoin-astronaut-cat-explained|name=Craig Wright’s Fight With a Cartoon Bitcoin Astronaut Cat Explained|org=Coindesk|date=April 17, 2019}}</ref>
 +
 
 +
[[Binance]] and [[ShapeShift]] afterward announced they would de-list [[Bitcoin Cash SV]]. Kraken later announced that it would be doing the same, citing "community sentiment" around Bitcoin Cash SV as its 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."<ref>{{cite web|url=https://www.financemagnates.com/cryptocurrency/news/binance-delists-bchsv-ceo-calls-craig-wright-a-fraud/|name=Binance Delists BCHSV, CEO Calls Craig Wright “a Fraud”|org=Finance Magnates|date=April 15, 2019}}</ref><ref>{{cite web|url=https://www.coindesk.com/kraken-exchange-joins-binance-shapeshift-in-delisting-bitcoin-sv|name=Kraken Exchange Joins Binance, ShapeShift in Delisting Bitcoin SV|org=Coindesk|date=April 17, 2019}}</ref>
 +
 
 +
=== FX Trading ===
 +
 
 +
In March 2020, Kraken announced that it would be allowing its traders to "expand their horizons" by launching FX trading on its platform on March 12, 2020 at 14:30 UTC. The announcement said that trading would be possible between all currencies currently offered in its fiat-to-crypto pairings, including EURCAD, USDCAD, EURCHF, EURGBP, USDCHF, EURJPY, USDJPY, EURUSD and GBPUSD.<ref>{{cite web|url=https://www.financemagnates.com/cryptocurrency/trading/kraken-opens-up-fx-trading-for-crypto-users-except-us-residents/|name=Kraken Opens up FX Trading for Crypto Users, Except US Residents|org=Finance Magnates|date=March 12, 2020}}</ref>
  
 
== Key People ==
 
== Key People ==
  
[[Jesse Powell]], CEO and Co-founder
+
*[[Jesse Powell]] - CEO and Founder
 +
*Nicholas Percoco - Chief Security Officer
  
 
== References ==
 
== References ==
Line 52: Line 111:
 
[[Category: bitcoin]]
 
[[Category: bitcoin]]
 
[[Category: wallets with security issues]]
 
[[Category: wallets with security issues]]
 +
[[Category: exchanges]]

Latest revision as of 11:25, 12 March 2020

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 cryptocurrencies 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 cease 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 against bitcoin 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 email to 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]

Kraken valued itself at $4 billion in June 2019 when it raised $13.5 million from 2,263 accredited investors on the online investment platform BnkToTheFuture. In the deal, the investors bought shares in an illiquid special purpose vehicle which bought equity in Kraken. Kraken was conducting a private placement at the same time.[22]

In July 2019, former B2C2 managing director Kevin Beardsley joined Kraken Futures to help develop the business for European customers.[23]

On July 31, 2019, Kraken announced that Etana Custody would now allow Kraken customers to transact in U.S. dollars, euros, Canadian dollars, British pounds, and Japanese yen worldwide. Users need to create an Etana Custody Wallet to do so.[24]

Law enforcement requests

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."[25] Kraken reported in January 2020 that the growth in regulatory requests had slowed in 2019 to a year-on-year increase of about 50% to 710 requests. The share of requests coming from U.S. authorities had declined to about 62% of the total number of requests.[26]

ICO Rating's security report

In January 2019 the independent cryptocurrency markets analysis firm ICO Rating ranked 135 of the world's most popular cryptocurrency exchanges according to their security. 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+."[27]

Crypto Facilities acquisition

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.[28] 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.[29]

In March 2019, Crypto Facilities told Cointelegraph that its trading volumes increased by 500 percent after being acquired by Kraken.[30]

Lawsuit

In late November 2019 Nathan Runyon, a former employee of Kraken, filed a lawsuit against the company. According to the lawsuit, Runyon was asked to falsify exchange data to help the company pass audits, as well as ignore surreptitious changes in stock option grant vesting schedules that took place after the schedules had been posted in board meeting minutes. Though he attempted to bring these discrepancies to the attention of his superiors, the lawsuit says that Runyon was told to ignore them. Runyon also alleges that Kraken profited illegally from sanctioned parties on the Office of Foreign Assets Control’s Specially Designated Nationals and Blocked Persons List; the lawsuit says that he attempted to address this "multiple times," but was ignored and faced repeated instances of workplace harassment, discrimination, and ultimately undue termination as a result. The lawsuit also includes other damning allegations not related specifically to the charges; it says that while training under an unnamed Kraken employee, he was asked by that employee to clarify basic financial concepts, such as, "what causes the price of bitcoin to go up and down (market supply/demand)" and, "who owns the blockchain." Runyon is seeking restitution for damages related to harassment at work, discrimination and breach of contract.[31][32]

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, Swiss Franc, and British pound.[33][34] In January 2020, Kraken listed USDC, a stablecoin created as a joint venture by Circle and Coinbase.[35]

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.[36][37]

Kraken futures is not available to U.S. residents.[38]

According to Kevin Beardsley, head of business development at Kraken Futures, the platform provides its traders with rebates of 30 percent of the fees it collects.[39]

In a November 2019-dated blog post, Kraken announced that it was launching futures market development efforts in Russia including hiring Aleksey Bragin as a representative in the country.[40]

Cybersecurity Measures

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.[41]

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.[42]

Binance and ShapeShift afterward announced they would de-list Bitcoin Cash SV. Kraken later announced that it would be doing the same, citing "community sentiment" around Bitcoin Cash SV as its 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."[43][44]

FX Trading

In March 2020, Kraken announced that it would be allowing its traders to "expand their horizons" by launching FX trading on its platform on March 12, 2020 at 14:30 UTC. The announcement said that trading would be possible between all currencies currently offered in its fiat-to-crypto pairings, including EURCAD, USDCAD, EURCHF, EURGBP, USDCHF, EURJPY, USDJPY, EURUSD and GBPUSD.[45]

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. Over 2,000 Investors Back Kraken Crypto Exchange’s $13 Million Crowdfunding. CoinDesk.
  23. Kraken Futures snags a former OTC trader to attract big investors with enticing rebates. The Block.
  24. Kraken to Enable Worldwide Fiat Funding Options. CoinDesk.
  25. Kraken law enforcement requests tripled in 2018. The Block Crypto.
  26. "name=Law Enforcement Data Requests Rose by Almost 50 Percent in 2019, Says Kraken {{{name}}}. CoinDesk.
  27. Exchange Security Report V 2.0 Update. ICO Rating.
  28. Kraken Acquires Futures Startup In Deal Worth At Least $100 Million. Coin Desk.
  29. Crypto Exchange Kraken Raises $100 Million, Acquires London Futures Firm. Fortune.
  30. Crypto Futures Provider Volumes Increase 500 Percent After Acquisition by Kraken. Cointelegraph.
  31. Ex-Kraken Employee Alleges ‘Unethical and Illegal Tactics’ in Discrimination Lawsuit. Coindesk.
  32. REQUEST FOR PUNITIVE DAMAGES DEMAND FOR JURY TRIAL. Runyon v. Payward and NG.
  33. Kraken Opens up FX Trading for Crypto Users, Except US Residents. Finance Magnates.
  34. Fiat currencies available on Kraken. Kraken.
  35. Kraken Lists USDC the Day After Binance Drops It for Some Pairs. Coindesk.
  36. Kraken Exchange Announces Launch of Both Spot and Futures Trading. Bitcoin Exchange Guide.
  37. Kraken Futures is a new way to trade. Kraken Blog.
  38. Unlock futures trading with our Crypto Facilities acquisition!. Kraken.
  39. Kraken Futures snags a former OTC trader to attract big investors with enticing rebates. The Block.
  40. Kraken Futures Ramps Up Russian Operations. {{{org}}}.
  41. A letter from Kraken’s Chief Security Officer – Nick Percoco. Kraken Blog.
  42. Craig Wright’s Fight With a Cartoon Bitcoin Astronaut Cat Explained. Coindesk.
  43. Binance Delists BCHSV, CEO Calls Craig Wright “a Fraud”. Finance Magnates.
  44. Kraken Exchange Joins Binance, ShapeShift in Delisting Bitcoin SV. Coindesk.
  45. Kraken Opens up FX Trading for Crypto Users, Except US Residents. Finance Magnates.