Kraken is a centralized digital currency exchange platform, founded in 2011. It provides users with a platform for trading various digital currencies, intended to offer trading tools, user-friendly interfaces, security measures, and regulatory compliance features.^[2][3]

Overview

Founded in July 2011 by Jesse Powell, Michael Gronager, and Thanh Luu, Kraken launched in March 2013, initially offering Bitcoin, Litecoin, and euro trades. It later expanded its offerings to include additional currencies and margin trading.

In 2014, amidst the growing popularity of cryptocurrencies, Kraken, alongside the Coinbase exchange, was selected to provide market data for Bitcoin trading to the Bloomberg terminal, a testament to its growing influence in the industry.

Kraken allows trades in over 200 cryptocurrencies and offers over 600 cryptocurrency pairs. As of January 15, 2023, Kraken was listed as the world's third-largest cryptocurrency exchange.

Registered as a Money Service Business (MSB), Kraken achieved a significant milestone when its cryptocurrency exchange, Kraken Financial, became the first crypto company to obtain a bank charter.

Notable transitions include Michael Gronager's departure in 2015 to fully pursue Chainalysis and Jesse Powell's shift from CEO to Chairman in 2022, after a controversy.^{[4][5][6][7][8]}

History

Mt. Gox Assistance

In 2014, Mt. Gox, formerly Bitcoin's largest exchange, ceased operations due to undetected hackings, resulting in the loss of millions of dollars worth of customers' Bitcoins. This event left 850,000 bitcoins unrecovered, affecting 127,000 customers.

It was revealed that the exchange had accumulated a substantial debt of approximately 6.5 billion Japanese yen ($63.6 million). CEO Mark Karpeles faced legal consequences, arrested by Japanese authorities in 2015 on charges related to embezzlement and breach of trust.

In response, Kraken was selected to assist in investigating and distributing the remaining assets to creditors. Chosen through criteria such as operational reliability, customer service, and expertise, Kraken aimed to provide support during the crisis.

At a Tokyo meeting on February 18, 2016, it was reported that out of 9,863 individuals who filed Bitcoin-only claims, 7,952 were approved, with ¥12,583,717,791 JPY in Bitcoin distributed to creditors, while ¥27,547,026,403 JPY remained in reserve.^{[9][10][11][12][13]}

Obtainment of Bank Charter

In September 2020, Kraken Financial made history as the first cryptocurrency firm to secure a bank charter from the Wyoming Division of Banking, obtaining a special-purpose depository institution (SPDI) charter tailored for crypto businesses. Unlike traditional banks, SPDIs cannot loan customer deposits and are not required to obtain FDIC insurance, although they have the option to do so.

Kraken planned to offer various banking services, including cryptocurrency-based bill payments and salary receipts, with a digital-first banking model complementing its physical presence in Cheyenne, Wyoming.

“We’re thrilled to work in a state so aligned with our philosophy and values. Wyoming is a rare and shining example of how thoughtful regulation can drive innovation for FinTech companies.” - David Kinitsky (CEO of Kraken Financial, former Kraken Bank)

Kraken Entrance and Exit from Japan

Kraken announced the introduction of Bitcoin-to-Japanese yen (XBT/JPY) trading on October 30, 2014, alongside the launch of domestic JPY funding options for clients in Japan. Bitcoin-to-euro trading (XBT/EUR) had been available since Kraken's establishment in September 2013.

“Suspending services for Japan residents will allow us to better focus on our resources to improve in other geographical areas,” - Kraken announcement

However, Kraken later decided to withdraw its services from Japan due to escalating operational costs, as stated on April 17, 2018. Despite this move, the exchange indicated the possibility of resuming services in the future, emphasizing that the suspension only applied to residents within Japan.

In September 2020, Kraken expressed its excitement about reopening services in Japan, as part of its broader strategy to expand into high-growth Asia-Pacific (APAC) markets. This decision followed the exchange's entry into the Australian market through the acquisition of Bit Trade and the introduction of funding and trading in Australian dollars.

Despite these plans, Kraken announced the closure of its operations in Japan again, effective January 31, 2023. The exchange ceased cryptocurrency trading services through its Japanese subsidiary, Payward Asia, and deregistered from Japan's Financial Services Agency.^{[15][16][17][18][19]}

Kraken Limitations in Canada

Kraken suspended transactions involving Tether (USDT), Dai (DAI), Wrapped Bitcoin (WBTC), Wrapped Ether (WET), and Wrapped Axelar (WAXL) in Canada from November to December 2023.

This decision followed preceding Canadian regulatory changes and consultations with regulatory authorities. Similar actions had been taken by other exchanges in 2023.

Kraken aimed to uphold a quality trading experience for Canadian clients despite these suspensions. Transactions for the specified assets ceased on November 30th, followed by withdrawals on December 4th. The remaining assets were converted to U.S. dollars and credited to users' accounts by December 5th.^[20][21]

Products

Kraken Financial

Kraken Financial operates as a Special Purpose Depository Institution (SPDI), established and headquartered in Wyoming, USA, under Wyoming law. Functioning as a bank, it receives deposits and conducts incidental banking activities, such as custody, asset management, and servicing.

Unlike traditional banks, Kraken Financial operates exclusively through its online platform, aiming to provide clients with the security and services expected from regulated financial institutions while facilitating access to the digital asset ecosystem.

Deposits at Kraken Financial are not insured by the FDIC but are fully reserved under Wyoming law. Fiat deposits are backed by 100% or more of USD cash and high-quality liquid assets.

Furthermore, client assets are segregated from both Kraken Financial's and Kraken exchange's assets, with regular audits and examinations conducted by the Wyoming Division of Banking to ensure safety.^[14][22]

Kraken NFT Marketplace

Kraken introduced its NFT marketplace on June 8, 2023, offering a selection of over 250 collections. It provides a transaction experience without gas fees and had been in development for over a year, with the Beta having launched in November the year before, supporting Ethereum, Solana, and now Polygon NFTs.

The platform seeks to accommodate users of varying levels of crypto familiarity, accepting both fiat and cryptocurrencies. Presently, it integrates with MetaMask and Phantom wallets, with future plans for WalletConnect compatibility.^[33][34]

Kraken Pro

In December 2022, Kraken unveiled Kraken Pro, a suite of advanced trading tools and an updated interface that aims to streamline access to spot trading, margin trading, staking, and portfolio management. Geared towards experienced traders, Kraken Pro utilizes cutting-edge technology to minimize latency and handle high demand, supporting over 210 coins or tokens.

The redesigned user interface prioritizes trade execution, advanced order management, and analytical tools, with the goal of improving efficiency in advanced trading and portfolio management. Its modular design offers customization options for users.^[35]

Acquisitions

Kraken has acquired the following companies:^[1]

• Staked us
• Bit Trade
• Circle Trade
• Picks & Shovels
• CryptoFinance.ai
• CryptoFacilities
• Cryptowatch
• Glidera
• CleverCoin
• Coinsetter

Controversies

New York Attorney General's Office

In 2018, the New York State attorney general raised concerns about the legality of operations at the Kraken cryptocurrency exchange. Barbara Underwood, the then-attorney general, highlighted Kraken in a report examining the integrity of global cryptocurrency exchanges, suggesting potential unlawful conduct.

The report scrutinized various aspects of the exchanges, including their business practices, trading policies, conflict management, security measures, and handling of consumer funds.

Kraken's inclusion in the report stemmed from its decision to cease operations in New York in 2015, citing objections to the state's regulatory framework, particularly the BitLicense requirements. Despite Kraken's non-participation, the report advised caution when engaging with platforms unable to address the issues raised.^[23][24]

Glassdoor Review Lawsuit

In January 2019, Kraken reportedly laid off over 50 employees, prompting negative reviews on Glassdoor. Kraken's parent company, Payward, sued Glassdoor to reveal the reviewers' identities, alleging a breach of severance agreements. A California court ordered Glassdoor to comply.

The Electronic Frontier Foundation criticized Kraken's actions, stating it aimed to silence employees. The EFF argued against the subpoena, citing lack of specificity and violation of California law protecting freedom of expression. Despite one individual deleting their reviews, the lawsuit's intent was seen as deterring others from sharing opinions.^[39][25]

“In the cryptocurrency industry, security and reputation are paramount. Like its peer companies, Kraken uses confidentiality and severance agreements to protect the platform's security and its reputation. In those agreements, each side receives something. The former employee at issue here would like to benefit from the agreement without upholding his or her side of the bargain. We welcome employee feedback, but we won't tolerate double-dealing.” - Jesse Powell

Commodity Futures Trading Commission Dispute

The Commodity Futures Trading Commission (CFTC) initiated proceedings against Kraken, asserting that the exchange facilitated margined digital asset transactions for ineligible U.S. customers from June 2020 to July 2021.

The CFTC emphasized the necessity for margined, leveraged, and financed digital asset trading to occur on properly registered and regulated exchanges, in compliance with all pertinent laws and regulations.

As a resolution, Kraken consented to pay $1.25 million in penalties. Additionally, the CFTC cited Kraken for its failure to register as a futures commission merchant.^[26]

Office of Foreign Assets Control Dispute

Kraken settled with the U.S. Treasury Department's Office of Foreign Assets Control (OFAC) over alleged violations of sanctions against Iran in 2022. The settlement involved Kraken paying around $362,000 in fines and investing an additional $100,000 in sanctions compliance controls.

OFAC found that Kraken processed 826 transactions for Iranian users from October 2015 to June 2019, despite having controls to prevent users in sanctioned jurisdictions from opening accounts. This agreement came amid increased regulatory scrutiny of the cryptocurrency sector.^[27]

Work Environment Controversy

In June 2022, former Kraken's CEO, Jesse Powell, sparked controversy by questioning the use of preferred pronouns, discussing racial terminology, and challenging gender-related stereotypes during employee interactions.

This ignited internal discord among Kraken's workforce, with some employees openly criticizing Powell's remarks as hurtful and divisive. Others accused him of fostering a hostile work environment and affecting their mental well-being.

Following the incident, Kraken published a culture statement emphasizing its commitment to a "crypto-first culture," which prompted further debate. Powell asserted that those who disagreed with the company's stance could choose to leave and participate in a program offering four months' pay.

Despite internal tensions, Kraken's leadership indicated a firm stance on maintaining its culture, up until Powell resigned from the CEO position later the same year.^[28][29]

“People get triggered by everything and can’t conform to basic rules of honest debate. Back to dictatorship.” - Jesse Powell

SEC Dispute

In November 2023, the U.S. Securities and Exchange Commission (SEC) charged Kraken with allegedly operating its trading platform as an unregistered securities exchange. The SEC accused Kraken of facilitating the buying and selling of crypto asset securities without proper registration, potentially depriving investors of essential regulatory protections. The SEC's complaint outlined Kraken's activities since September 2018, alleging that the exchange conducted functions typical of securities exchanges, brokers, dealers, and clearing agencies without proper registration.

In May 2023, Kraken testified before congressional committees, advocating for clearer regulatory guidelines in the digital asset industry. Kraken argued for laws tailored to digital assets' unique characteristics and expressed concerns about the SEC's jurisdiction.

Eventually, Kraken agreed to cease offering securities through its crypto staking services and staking programs and agreed to pay a $30 million civil penalty.

On February 22, 2024, Kraken filed a motion to dismiss the SEC's lawsuit, claiming that the SEC's claims lacked evidence of fraud or consumer harm.^[30][31][32]

Developments

Mastercard Partners with Kraken

On April 8, 2025, Kraken announced its partnership with Mastercard which entails issuing crypto debit cards across the United Kingdom and Europe. The partnership will enable the crypto exchange to expand its payment offerings by launching physical crypto debit cards.

The partnership comes as Kraken continues to pursue a license under the European Union’s regulatory framework, the Markets in Crypto-Assets Regulation (MiCA).

The debit card will allow users to spend cryptocurrencies and stablecoins directly. Kraken said the rollout will begin in the coming weeks, with a waitlist now open to customers. ^[36]

Kraken said its partnership with Mastercard builds on the rapid growth of Kraken Pay, a new tool that enables customers to send money from their Kraken account.

“Crypto is evolving the payments industry, and we see a future where global commerce and everyday payments are underpinned by crypto,” Kraken co-CEO David Ripley said in a statement shared with Cointelegraph.

“Our clients want to be able to seamlessly pay for real-world goods and services with their crypto or stablecoins,” he said, adding:

“Partnering with Mastercard is a major step toward us bringing that vision to life. Together, we will unlock crypto’s true everyday utility, ensuring it remains undeniably relevant and usable long-term.”

Kraken Launches Commission-Free Stock & ETF Trading Expansion

On April 14, 2025, Kraken began a phased national rollout of commission-free trading for over 11,000 U.S.-listed stocks and exchange-traded funds. ^[37]

"Expanding into equities is a natural step for us, and paves the way for the tokenization of assets. The future of trading is borderless, always on and built on crypto rails," Kraken co-CEO Arjun Sethi said.

Kraken users will be able to trade stocks and ETFs in some U.S. states, including New Jersey, Connecticut, Wyoming and Oklahoma, starting April 14, 2025.

"Another step taken by Kraken to become a full-service app offering both traditional finance (TradFi) and crypto services," Oppenheimer analyst Owen Lau said.

Bunq partners with Kraken to launch crypto trading services

In April 2025, the Dutch neobank Bunq declared its plans to launch a crypto trading service called Bunq Crypto. The service will be initially available across six European nations, including the Netherlands, France, Spain, Ireland, Italy, and Belgium.

Launched in partnership with crypto exchange Kraken, users will be able to open an account “within seconds” and trade more than 300 crypto assets, including major assets like Bitcoin, Ethereum, and Solana. According to a report by Tech EU, the bank decided to dive into crypto due to high customer demand. ^[38]

Bunq founder and CEO Ali Niknam said the bank had wanted to provide crypto services for users earlier. However, due to regulatory constraints, it has refrained from making that leap. Now that the region has adopted clearer regulations for firms dealing with crypto, the bank has chosen to proceed with its plans.

“The regulatory landscape has changed and is now more susceptible to this kind of innovation; as always Bunq dived in and now we’re the first bank to deliver crypto!” said Niknam. ^[38]

Kraken Secures MiCA License in Ireland

On June 26, 2025, Kraken received regulatory approval under the European Union’s Markets in Crypto-Assets (MiCA) framework. The license was granted by the Central Bank of Ireland, enabling Kraken to operate legally as a Virtual Asset Service Provider (VASP) across all EU member states once MiCA takes full effect.

This milestone allows Kraken to expand its services within the European Economic Area (EEA), including custody, trading, and fiat services, under a unified regulatory framework. The approval is part of Kraken’s broader strategy to deepen its presence in Europe and align with upcoming crypto regulations.

Kraken’s Head of European Operations, Mark Jennings, described the license as "a key step in making Kraken a long-term part of Europe’s crypto landscape."

Kraken Acquires Breakout

On September 4, 2025, Kraken announced its acquisition of Breakout, an evaluation-based proprietary trading firm. The move is intended to expand Kraken's product offerings for advanced traders by providing them with access to prop trading.

Breakout's model allows skilled traders to earn payments by successfully deploying trading strategies at scale. To qualify, traders must purchase and pass a rigorous evaluation and stay above certain performance thresholds. Those who succeed receive a funded account and can retain up to 90% of the profits they generate.^[40]

Qualified traders can access up to $200,000 in notional capital, distributed across a maximum of two accounts. The platform offers trading on over 50 crypto pairs, with up to 5x leverage available for BTC and ETH contracts. Arjun Sethi, co-CEO of Kraken, stated;

"Breakout gives us a way to allocate capital based on proof of skill rather than access to capital itself... we want to build systems that reward demonstrated performance, not pedigree."

Over time, Breakout is planned to be integrated directly into the Kraken Pro platform.^[40]