Kraken
Exchange CustodyKraken is one of the oldest and most trusted cryptocurrency exchanges, operating since 2011 with no major security breaches. Known for strong security practices, proof of reserves, and a comprehensive trading platform.
Quick Verdict
With a Custody Score of 7.6/10, Kraken is ranked #3 of 10 among exchange custody providers. Its strongest category is Track Record and its weakest is Counterparty Diversification.
Analysis
Score Breakdown
The Custody Score is a weighted average across 8 criteria, each rated 1-10.
| Criterion | Score | Weight | Weighted |
|---|---|---|---|
| Security | 8.5 | 20% | 1.70 |
| Insurance | 5.5 | 15% | 0.83 |
| Regulatory | 8 | 15% | 1.20 |
| Fee Transparency | 8 | 10% | 0.80 |
| Track Record | 9 | 15% | 1.35 |
| Withdrawal Flexibility | 8.5 | 10% | 0.85 |
| Reporting & Audit | 8 | 10% | 0.80 |
| Counterparty Diversification | 2 | 5% | 0.10 |
| Total | 100% | 7.6 |
Key Features
- ✓95%+ cold storage
- ✓Proof of reserves
- ✓13+ year track record
- ✓Staking services
- ✓Futures and margin trading
- ✓24/7 customer support
Fee Breakdown
| Setup Fee | Free |
| Annual Custody Fee | None |
| Transaction Fee | 0.16-0.26% maker/taker |
| Withdrawal Fee | Network fees + small flat fee |
| Notes | Competitive trading fees. Free ACH deposits. Proof of reserves audited. |
Security Details
Key Management
Exchange hot/cold wallet system
Cold Storage
95%+ cold storage
SOC Compliance
SOC 2 Type 2
Penetration Testing
Yes
Incident History: No major security breaches in 13+ years
Insurance Coverage
Coverage
Not explicitly disclosed
Carrier
N/A
Details
Maintains significant cold storage reserves. Proof of reserves verified.
Regulatory Status
Licenses
- FinCEN MSB
- State money transmitter licenses
- FCA registered (UK)
- AUSTRAC (Australia)
One of the most compliant global exchanges. Bank partnership for USD.
Pros & Cons
Pros
- 13+ year track record with zero major breaches
- Proof of reserves — verified by third party
- 95%+ assets in cold storage
- Competitive trading fees
- Global regulatory compliance
Cons
- Exchange custody — you don't hold keys
- Insurance details not public
- US regulatory uncertainty
- Single custodian risk
- Past employee security incidents