Kraken

Founding and History

Kraken, a prominent cryptocurrency exchange, was founded in 2011 by Jesse Powell and Thanh Luu, in response to the vulnerabilities they observed in the Mt. Gox exchange, which suffered a catastrophic hack. Officially launched to the public in 2013, Kraken began by offering trading between Bitcoin, Litecoin, and fiat currencies such as USD and EUR, and quickly expanded to include a variety of other cryptocurrencies and additional fiat options.

From its inception, Kraken focused on security and regulatory compliance, distinguishing itself from competitors by never having been hacked—a rarity in the volatile cryptocurrency exchange landscape. The platform's commitment to security includes maintaining full reserves, robust internal controls, and regular audits.

Kraken's growth trajectory included significant funding rounds, starting with a seed round in 2011 followed by multiple series of funding that helped fuel its expansion and technology development. The company has been valued in the billions, reflecting its position as a major player in the cryptocurrency exchange market.

Throughout its history, Kraken has also been involved in several industry-related controversies and regulatory challenges, which have been critical in shaping its policies and practices. Despite these challenges, Kraken has remained a stable and influential platform in the cryptocurrency world, known for its wide range of supported cryptocurrencies and advanced trading features.

Products Covered

Kraken offers a wide range of products and services catering to both novice and experienced traders. These include:

• Spot trading: in a variety of cryptocurrencies including Bitcoin, Ethereum, and many others, offering a robust trading platform with advanced charting features.
• Futures trading: allowing users to speculate on the future price of cryptocurrencies with leverage.
• Margin trading: enabling traders to use leverage to increase their trading position.
• Cryptocurrency staking: which allows users to earn rewards by holding certain cryptocurrencies in their Kraken account.
• OTC trading: for large volume trades, providing personalized service for high-net-worth individuals and institutional traders.
• Cryptowatch: a comprehensive trading terminal that offers real-time cryptocurrency market data, charting, and trading services across multiple exchanges.

Impact and Contributions to the Industry

Kraken has made significant contributions to the cryptocurrency industry, both through its platform and its involvement in broader industry initiatives:

• Security Innovations: Kraken has set high standards in the industry for security, implementing rigorous measures and encouraging best practices among its users.
• Regulatory Compliance: It has been a pioneer in working with regulators around the world to ensure compliance with local laws and regulations, thereby promoting the mainstream acceptance of cryptocurrencies.
• Educational Resources: Kraken provides extensive educational resources, making cryptocurrency trading more accessible and understandable for newcomers.
• Liquidity Provider: By offering a wide range of cryptocurrencies and trading pairs, Kraken plays a crucial role in providing liquidity to the market, which is essential for the healthy functioning of the cryptocurrency ecosystem.

Points of Interest

• Leadership and Regulatory Strategy Enhancements: Kraken appointed Gilles BianRosa as Chief Operating and Product Officer and Marcus Hughes as Global Head of Regulatory Strategy, indicating a focus on regulatory compliance and market expansion.
• European Expansion via Acquisition: Kraken acquired BCM, a Dutch crypto broker, aiming to strengthen its presence in Europe in compliance with the MiCA regulatory framework.
• Product Innovations and Market Access: Kraken introduced updates like new OTC pairs, custom layouts on Kraken Pro, and expanded its service in the Netherlands, demonstrating its commitment to innovation and user satisfaction.
• Quest for Federal Reserve Account: Kraken Bank, a Wyoming subsidiary, received a routing number from the American Bankers Association, moving it closer to gaining equal treatment with traditional banks and enhancing its service offerings.