Choosing a trustworthy cryptocurrency exchange is crucial, as it directly impacts the security of your digital assets. With the rising risk of scams, users must exercise extreme caution. Kraken, a popular crypto exchange, has garnered significant interest in the UK. But is it legal and safe to use? This review explores its regulatory status, security features, and overall reliability.
Is Kraken Legal in the UK? Licensing and Regulation
Kraken operates as a regulated exchange in most countries, excluding those under international sanctions (e.g., North Korea, Iran, Syria, Cuba, Crimea, Donetsk, and Luhansk). Local regulatory restrictions may also apply.
To assess Kraken’s credibility, we compared its regulatory compliance with top competitors like Bybit and MEXC. Exchanges with Tier-1 regulation are typically the safest.
Kraken’s Regulatory Compliance
| Regulation Type | Kraken | Bybit | MEXC |
|---|---|---|---|
| Government-Regulated | Yes | Yes | No |
| Tier-1 Regulation | Yes | Yes | No |
| U.S. Regulation | Yes | No | No |
| FCA (UK) | Yes | No | No |
| AUSTRAC (Australia) | Yes | No | No |
| DFSA (UAE) | No | No | No |
| AMF (France) | Yes | No | No |
| Spain | Yes | No | No |
| Germany | Yes | No | No |
👉 Explore Kraken’s security features
Security Measures
| Feature | Kraken | Bybit | MEXC |
|---|---|---|---|
| 2FA | Yes | Yes | Yes |
| KYC Verification | Yes | Yes | Yes |
| Past Hacks | No | Yes | No |
| Cold Wallet Storage | Yes | Yes | Yes |
| Investor Protection Fund | No | Yes | No |
Kraken Exchange Overview
Kraken supports trading for Bitcoin, Ethereum, Tether, Cardano, XRP, and other cryptocurrencies, alongside fiat currencies like EUR, USD, GBP, and JPY.
Key Features
| Feature | Details |
|---|---|
| Account Currency | Crypto & Fiat |
| Minimum Deposit | $1 |
| Leverage | 1:5 (Margin), 1:50 (Futures) |
| Trading Fees | Up to 0.26% |
| Mobile App | iOS & Android |
| Referral Program | 20% commission from referrals |
Pros and Cons of Kraken
✅ Pros
- User-friendly trading terminal
- Supports major cryptocurrencies & fiats
- Low trading fees (up to 0.26%)
- High liquidity due to large trading volumes
- Margin & futures trading with leverage
❌ Cons
- No investment programs
- No dedicated call center
UK-Specific Regulations
FCA Licensing
The UK’s Financial Conduct Authority (FCA) requires crypto exchanges to comply with AML/CFT (Anti-Money Laundering & Counter-Terrorist Financing) policies. To operate legally, exchanges must:
- Register with the FCA
- Maintain a UK bank account
- Implement KYC procedures
- Establish internal audit mechanisms
Investor Protection
The Financial Services Compensation Scheme (FSCS) safeguards UK investors, offering compensation in case of a firm’s insolvency.
Taxation
Cryptocurrencies are classified as assets in the UK. Profits from trading are subject to Capital Gains Tax (CGT):
– 10% (Basic rate taxpayers)
– 20% (Higher rate taxpayers)
👉 Learn about crypto taxes in the UK
Final Verdict: Is Kraken Safe for UK Users?
While Kraken isn’t FCA-licensed, this is common for crypto exchanges in the UK, as the FCA doesn’t issue crypto-specific licenses. The platform has a strong security record and is widely trusted.
FAQ
❓ Is Kraken legal in the UK?
Yes, Kraken operates legally in the UK but isn’t FCA-licensed (as few crypto exchanges are).
❓ What security features does Kraken offer?
Kraken provides 2FA, KYC verification, and cold wallet storage to protect user funds.
❓ Has Kraken ever been hacked?
No, Kraken has never suffered a major security breach.
❓ Are crypto profits taxable in the UK?
Yes, crypto trading profits are subject to Capital Gains Tax (10% or 20%).
❓ Should I use Kraken if I’m a beginner?
Yes, Kraken’s intuitive interface and educational resources make it beginner-friendly.
❓ Does Kraken support GBP deposits?
Yes, Kraken allows deposits and withdrawals in GBP.