Kraken Review: Pro Fees, Instant-Buy Spreads and US Compliance

What Kraken legally is, who owns it, and why the answer to who is on the other side of your bitcoin is a private company.

Kraken is a trade name. The operating group is Payward, Inc., a holding company in San Francisco, and its subsidiaries: Payward Ventures, Inc., which does business as Kraken with US clients, and Payward Trading Ltd. Regulators name those entities separately, a useful tell about where the risk sits: the CFTC’s 2021 order was against Payward Ventures d/b/a Kraken; the SEC’s 2023 staking order named Payward Ventures and Payward Trading; its 2023 exchange complaint named Payward, Inc. and Payward Ventures.

Jesse Powell founded the company on July 28, 2011 and the exchange opened for trading in 2013. Powell ran it until April 2023, when Dave Ripley became chief executive and Powell moved to the chairman’s seat; Arjun Sethi, a director since 2021, joined Ripley as co-chief executive on October 30, 2024 (Business Wire). What matters for a reader is the ownership: Payward is privately held, has never filed a public annual report, and publishes results by press release rather than into a filing system where a fact checker can pull audited statements.

In one sentence: Kraken is a private, venture-funded operating company that runs a crypto exchange, holds your coins and dollars as custodian, quotes prices as a principal on its retail app, and holds your spot balance in an entity that is not a bank, not a registered broker-dealer, and not covered by deposit insurance.

The money behind it

The valuation marks tell the story of the last ten months better than any press release. Payward raised $800M at a $20B valuation in November 2025 and filed a confidential draft Form S-1 with the SEC that month. In April 2026 it took money at roughly $13.3B, a third below the November mark, in a round that included a $200M secondary purchase by Deutsche Börse for about 1.5% fully diluted. On May 8, 2026 CoinDesk reported it was seeking fresh capital back at $20B. On September 10, 2026 Nasdaq invested $100M at a $21B valuation, 58% above the April price, as part of a deal to distribute Nasdaq’s tokenised stocks (Bloomberg and CoinDesk, September 10, 2026). A private mark that fell a third and then rose 58% inside six months is a negotiated number, not a price.

On September 2, 2026, CoinDesk reported that Payward had pushed the listing to the second quarter of 2027 at the earliest. Payward has issued no statement of its own. That matters to someone buying $5,000 of bitcoin, because a registration statement is the single event that would force Payward to publish audited financials, a full description of how client assets are held, and a risk-factor section written by lawyers who are liable for it. Until then, everything you know about Kraken’s balance sheet comes from the company’s own press releases.

What the company earns

Payward’s 2025 full-year highlights, published on its own site and reported by FX News Group and Finance Magnates in 2026, were adjusted revenue of $2.2B, up 33% on 2024, and adjusted EBITDA of $531M, up 26%. About 47% came from trading and 53% from asset-based and other sources: staking commissions, custody, interest on client cash and subscriptions. Total platform transaction volume was $2.0T, up 34%.

The quarterly path, from Payward’s own financial-highlights releases: Q1 2025 adjusted revenue $492M, Q2 2025 $432M with $80M of adjusted EBITDA, Q3 2025 a record $648M with $178.6M of adjusted EBITDA, Q4 2025 $625M with $84M. Then the profit went. Q1 2026 adjusted revenue was $507M, up 3%, on adjusted EBITDA of $18M, a quarter Payward itself called its toughest in four years; Q2 2026 was $508M, up 17%, on adjusted EBITDA of $23M, with platform volume of $310B and funded accounts up 42% to 6.6M. Assets on platform stood at $40B on June 30, 2026, down from $48.2B at the end of 2025.

Read that chart as a fee-policy forecast, not a scoreboard. Revenue has been flat at roughly $508M for two quarters into mid-2026 while adjusted EBITDA fell from $178.6M in Q3 2025 to $18M and $23M in the first two quarters of 2026, a drop of about 87% from the peak. A company with a stalled listing, a flat revenue line and a collapsed margin has one obvious lever, and on July 9, 2026 it pulled it.

The regulatory perimeter

Your Kraken account is regulated, but not by the regulator most people assume. Payward Ventures holds a money services business registration with FinCEN and money transmitter licences in 46 US jurisdictions; it is not a registered securities exchange, and it has fought and settled cases on that boundary since 2021. A separate entity, Payward Financial, holds the Wyoming special purpose depository institution charter granted in 2020 and trades as Kraken Financial; it became the first digital-asset bank to receive a Federal Reserve master account (Business Wire, March 4, 2026). Do not read that across to your spot balance, which sits with Payward Ventures, the money transmitter, not with the chartered bank. The futures business is supervised again: Payward’s $1.5B purchase of NinjaTrader, announced March 20, 2025, brought in a CFTC-registered futures commission merchant with capital requirements and segregated customer funds, and Bitnomial closed on May 1, 2026.

Kraken does not serve residents of New York, Washington or Maine, and fiat transfers are unavailable in Indiana, Louisiana, Massachusetts and Utah, per state-availability trackers as of June 2026. Washington and New York residents can pre-register for approval that has not arrived. Kraken’s own supported-states page was blocked to our network, so check it before you spend time on verification.

A dollar from your bank account to a coin and back, marking every point where Kraken takes a cut.

Sign-up and identity checks

You open an account with an email address, then complete identity verification: legal name, date of birth, address, Social Security number and a government identification document. Verification level sets your funding and withdrawal limits, and there is no anonymous tier for US residents. Approval is usually quick, but verification and account-review delay is the loudest theme in public complaints, covered in the risks section.

Funding

US dollar funding runs over ACH and wire. ACH deposits are free. Cash deposited by ACH through Plaid is available to trade immediately but held from withdrawal for seven days, and card, PayPal and digital-wallet purchases trigger a temporary 72-hour withdrawal hold on the equivalent amount. Bank wires cost $5 domestic and $40 international, in each direction, per Kraken’s 2026 cash deposit and withdrawal pages. The old MVB Bank rail closed to deposits arriving after May 31, 2024. Instant USD withdrawals launched March 18, 2026 and run 24 hours a day, including weekends and federal holidays (Business Wire, March 18, 2026). Crypto deposits are generally free; you pay the sending network’s fee, not Kraken’s.

The fork in the road: two Krakens

This decision determines most of what a retail buyer pays, and the interface does not make it obvious. Instant Buy is the simple flow in the Kraken app and on the main website. You type a dollar amount, see a quantity of coin, and press buy. Kraken charges a 1% transaction fee and quotes a price that already contains a spread, which its own FAQ describes as the difference between the market rate and the rate you receive, calculated before execution and varying with size, asset, payment method and market. Secondary 2026 analysis puts that spread at 0.5% to 2%, for an all-in cost of 1.5% to 2.5%.

Kraken Pro is the order book. You see bids and offers, place limit or market orders, and pay a published maker or taker fee with no spread on top, because you trade against other clients’ resting orders rather than Kraken’s quote. Both interfaces sit on the same account and the same balances. Switching costs nothing.

What you actually own

You own a balance in Kraken’s ledger. Kraken records that you are entitled to the bitcoin and holds coins in its own wallets. The Global Terms of Service are explicit that none of the digital assets in a client account are Kraken’s property, are loaned to Kraken, or are subject to the claims of Kraken’s creditors. That is a contract term, not a court ruling: whether it survives an insolvency is decided by a bankruptcy judge reading the whole relationship. There is no FDIC insurance on crypto and no SIPC coverage on a spot account. That is the structural fact every fee comparison sits on top of.

How Kraken gets paid at each step

• Trading: the maker or taker fee on Kraken Pro, or 1% plus spread on Instant Buy.
• Staking: 20% of the rewards your assets earn.
• Holding: the July 9, 2026 tiers pay you basis points for leaving assets on the platform, a revenue strategy rather than a discount.
• Subscription: Kraken+ at $4.99 a month or $49.99 a year.
• Funding: wire fees in and out, plus the spread in currency conversion.
• Futures: separate derivatives schedules through NinjaTrader and Bitnomial.

Exit

There are two exits. Selling to dollars and withdrawing by ACH or wire leaves you inside Kraken’s queue. Withdrawing the coin to a wallet whose private keys you hold ends your counterparty exposure to Payward. Crypto withdrawal fees vary by asset and network and are displayed at confirmation; the standard bitcoin withdrawal fee was 0.0005 BTC in 2026 per third-party fee trackers, which is worth timing rather than repeating weekly.

The menu as of September 17, 2026.

Spot trading

Counts differ by method: CoinLaw put Kraken at more than 530 cryptocurrencies across 1,271 trading pairs in the third quarter of 2025, while Kraken’s own 2026 marketing advertises 600-plus pairs and seven fiat currencies. For the reader this review is written for, the relevant subset is small: bitcoin, ether, solana, the large stablecoins and perhaps a dozen other liquid assets. A listing is not liquidity.

Instant Buy and recurring buys

The retail flow, including scheduled recurring purchases, at 1% plus spread.

Staking

Kraken relaunched US staking on January 30, 2025, two years after the SEC settlement forced it to shut the old programme. It came back in 39 US states and territories across 17 blockchains, through Kraken Pro, structured as bonded staking, where assets lock to the network for a defined period. As of September 2026 Kraken’s asset pages advertise up to 2.63% APY on ETH and up to 4.71% APY on SOL, both before commission and both estimates of recent network rewards rather than promised rates. Kraken’s support page states it retains 20% of rewards; secondary 2026 summaries report 15% to 30% on bonded staking and up to 30% on flexible products. That spread is unresolved at publication, so price your own asset on the staking page before you lock anything.

Net of the 20% commission, a 2.63% ETH rate becomes 2.10% and a 4.71% SOL rate becomes 3.77%, both denominated in a volatile asset and both taxable as ordinary income on receipt. At a 30% commission they are 1.84% and 3.30%.

Kraken+

A subscription at $4.99 a month or $49.99 a year, with a 30-day trial. It waives the transaction fee on up to $10,000 a month of Buy, Sell, Convert and recurring orders in the main app. The answer to the question the marketing avoids is no: the waiver does not cover Kraken Pro spot, futures, API or OTC fees, and spreads and card processing still apply. The other benefits are real but small: up to 4.50% APR on USDG and 4% on USDC balances, 800 free Koinly tax transactions, and the Kraken Drops token distribution programme.

Futures and derivatives

US retail futures through NinjaTrader, a CFTC-registered FCM, plus Kraken’s own derivatives book for eligible clients. Different fee schedule, different regulator, different risk.

xStocks, which US residents cannot buy

Kraken launched xStocks in June 2025 with 60 tokenised US stocks and ETFs, reaching 100 in 2026 against a stated target above 500 by the end of the year. They are Solana tokens representing 1:1 economic exposure to a listed share, collateralised by shares custodied in Switzerland and traded on Kraken Pro around the clock. Cumulative transaction volume passed $25B, about $3.5B of it on-chain, and perpetual futures on tokenised stocks followed on February 24, 2026. Nasdaq’s $100M investment on September 10, 2026 came with an agreement to distribute Nasdaq’s tokenised stocks on the platform. None of it is available to residents of the United States, the United Kingdom, Canada or Australia.

What is gone

The original staking-as-a-service programme, shut in February 2023 by SEC order. The MVB Bank USD funding rail, closed after May 31, 2024. The pre-July 2026 fee schedule, the subject of the next section.

Every dollar that leaves your pocket between the bank transfer and the coin, then the arithmetic on a real position.

The minimum

There is no account minimum. The practical floor is $10 for a debit-card Instant Buy, and on Kraken Pro each pair carries its own minimum order size in the asset. Kraken does not lock you out for being small; it makes being small expensive.

What changed on July 9, 2026

This is the most important fact in the review and most third-party pages had not caught up to it by September 2026.

Before July 9, 2026, Kraken Pro’s entry tier was 0.25% maker / 0.40% taker. From that date Kraken replaced product-specific volume bands with cross-platform tiers set by the best of three measures: 30-day spot volume, 30-day futures volume, or Assets on Platform, the dollar value of eligible assets you hold with Kraken. Whichever qualifies you for the better rate applies, to both spot and futures. Assets on Platform is assessed point in time rather than on a rolling average, so your tier moves with the market and drops the moment you withdraw.

The new entry tier is 0.40% maker / 0.80% taker. Holding $20,000 of eligible assets puts you in the third tier at 0.22% / 0.38%, with no trading required. The schedule runs to 0.00% / 0.05% at $500M of volume or $100M of assets. The rungs in between are reported inconsistently across 2026 fee guides and are unverified at publication; the rates we would put a number on are the entry tier, the $20,000 tier and the top.

Some 2026 fee pages, including several of Kraken’s own learn articles, still print 0.25% / 0.40% as the entry rate. We do not use those: Kraken’s support article on the cross-platform change and its product blog post both carry the 0.40% / 0.80% entry rate, and the pages printing the old numbers do not mention the change at all.

Kraken’s framing is that the tiers reward what you hold rather than only what you trade. True, and also a doubling of the price for the smallest accounts.

The full stack, item by item

• Kraken Pro maker fee: 0.40% at entry, 0.22% at $20,000 of assets on platform, as of July 9, 2026.
• Kraken Pro taker fee: 0.80% at entry, 0.38% at the same threshold.
• Instant Buy: 1% transaction fee, plus a spread never disclosed in advance as a percentage. All-in 1.5% to 2.5%.
• Staking commission: 20% of rewards per Kraken’s support page; 15% to 30% per secondary 2026 summaries.
• Kraken+ subscription: $4.99 a month or $49.99 a year; waives the app’s 1% fee, not Kraken Pro’s.
• USD wire, each way: $5 domestic, $40 international.
• ACH deposit: free, with a seven-day withdrawal hold on Plaid-funded cash and a 72-hour hold after card, PayPal and wallet purchases.
• Crypto withdrawal: variable by asset and network, quoted at confirmation; 0.0005 BTC standard for bitcoin.
• Currency conversion: a spread where you fund in one currency and trade in another.

The Kraken+ bar waives the 1% fee but not the spread, as Kraken’s terms say, adds one month of the annual subscription at $4.16, and uses a 1% spread, the low end of the reported range. At a 2% spread that route costs $204, more than twice a Kraken Pro market order at entry.

The worked example

Take $25,000, buy bitcoin, hold three years, sell, assuming bitcoin gains 50%. That is an assumption for the arithmetic, not a forecast; the fee conclusion does not depend on it.

Route A, Instant Buy both ways. Deposit $25,000 by ACH, free. Buy through the app at 1% fee plus about 1% spread, so $500 never reaches the coin and you hold $24,500 of bitcoin. Three years later that is $36,750. Sell through the same interface at another 1% plus 1%, costing $735. Withdraw $36,015 by ACH, free. Total cost: $1,235, or 4.94% of what you started with.

Route B, Kraken Pro limit orders. Same $25,000 ACH deposit. Because your assets on platform are $25,000, above the $20,000 threshold, you qualify immediately for the 0.22% maker rate. The limit order costs $55. You hold $24,945 of bitcoin, worth $37,417.50 three years later. Selling with another limit order at 0.22% costs $82. You withdraw $37,335. Total cost: $137, or 0.55%.

The gap is $1,320 on a $25,000 position, from pressing a different button in the same app.

The liquid comparison. Put the same $25,000 into the iShares Bitcoin Trust, IBIT, at a 0.25% expense ratio and commission-free at most US brokers. The same 50% gain gives $37,500 before costs, and three years of drag takes roughly $280, leaving about $37,220. Kraken Pro with limit orders beats the ETF by about $115 over the three years; Instant Buy loses to it by about $1,205.

The crossover is the number to remember. Kraken Pro costs about 0.44% once, on the round trip; IBIT costs 0.25% every year. The ETF is cheaper for holds under roughly 21 months and dearer after that. Instant Buy’s 4.94% round trip equals about twenty years of IBIT’s expense ratio.

That chart is the strategic story of 2026. Kraken’s entry tier used to sit at the left end of it; after July 9, 2026 it sits in the middle, below Coinbase and Gemini, above Bitstamp and Crypto.com. The advantage did not disappear, it moved: it begins at $20,000 of assets held, and below that the reason to choose Kraken has to be something other than price.

Cost at three activity levels

At $1,000 a month of taker volume with nothing held, Kraken Pro costs $8.00 against $9.00 on Coinbase Advanced’s US entry tier of 0.90% taker, set September 16, 2026. At $10,000 a month, a Kraken client holding $20,000 pays 0.38%, or $38; Coinbase lowered its advanced-tier threshold to $10,000 from $25,000 on the same date and began granting tier upgrades for USDC balances, though the rate a $10,000-a-month US trader receives is unverified at publication. Above that, both step down through rungs neither venue publishes cleanly, so price them yourself. Coinbase’s USDC rule makes the wider point: as of September 2026, assets-for-tier pricing is the industry’s design, not Kraken’s quirk.

What Kraken publishes about itself against what can be checked, because an exchange’s track record is not a return series but a record of solvency, uptime and whether client assets came back on demand.

There is no investment return to evaluate: Kraken is a venue, not a fund, and your return is the asset’s minus the costs above.

The claimed figures

Kraken’s claimed operating numbers are the ones above: $2.2B of adjusted revenue, $531M of adjusted EBITDA and $2.0T of volume for 2025, then 6.6M funded accounts and $40B of assets on platform at June 30, 2026. All are company-reported by press release, none audited in a public filing, and the two adjusted measures are ones Payward defines itself. The claimed staking rates, up to 2.63% on ETH and 4.71% on SOL as of September 2026, are quoted before commission and estimate recent network rewards rather than promise a rate.

What can be verified

The strongest verification Kraken offers is proof of reserves: periodic attestations in which an independent auditor confirms that on-chain holdings exceed total client balances, with a Merkle tree that lets a client check their own balance was included without exposing anyone else’s. Kraken publishes them roughly twice a year, most recently on a June 30, 2026 snapshot covering BTC, ETH, SOL, XRP, ADA and the major stablecoins. Every in-scope asset was at or above full backing: 102.9% for bitcoin, 100.5% for ether, 100.6% for solana, 102.3% for XRP, 100.3% for ADA and at least 105% for each stablecoin. That is better practice than most venues, and it has a limit Kraken does not advertise loudly.

Those ratios are the right thing to publish and they are not a solvency opinion. A proof of reserves covering eight assets verifies those assets at one moment: not fiat balances, not the long tail of listed tokens, and not the liabilities sitting off the ledger it attests to. Treat it as evidence that Kraken is not running a visible fractional reserve in bitcoin, and not as evidence that the company is solvent. Note also that the last dollar total Kraken publicised, $21.5B, came from a September 30, 2024 snapshot attested that November; the 2026 reports lead with ratios rather than a headline sum.

The realised record

Kraken has operated since 2013 with no publicly reported loss of client funds from an external breach of its custody systems. The June 2024 incident, in which CertiK researchers exploited an on-chain withdrawal flaw, took roughly $3M from Kraken’s own treasury rather than client balances, and the funds were returned. A real bug existed in the withdrawal system, and the loss landed on the company. Set against that, Kraken has paid $31.6M in US penalties since 2021, across three agencies on three theories. The realised record of an exchange is written in enforcement orders and uptime, and Kraken’s is better than most of its cohort and not clean.

How fast you get out, what it costs, and what happens if Payward fails.

Getting out of the position

Spot crypto on Kraken trades 24 hours a day. For bitcoin, ether and the major stablecoins, a retail-sized order fills immediately at a spread of a few basis points on the Pro order book. There is no lockup, no redemption window, no gate and no queue. That is the structural advantage crypto exchanges hold over every other platform in the alternatives universe: unlike a non-traded REIT, a fractional art vehicle or a private credit fund, Kraken cannot suspend your redemptions because the asset is illiquid.

Liquidity is asset-specific, not platform-specific. A position in a thinly traded token on the long tail of the listings can cost several percent to exit even though the venue is open. Check the depth of the book before sizing anything outside the top twenty assets.

Getting the money out

Cash withdrawals run over ACH and wire, with instant USD withdrawals available since March 18, 2026. The frictions are administrative: the seven-day hold on Plaid-funded ACH deposits, the 72-hour hold after card and wallet purchases, and account reviews that freeze withdrawals while compliance checks run. Those reviews are the dominant complaint theme across Trustpilot, the app stores and Reddit. Crypto withdrawals to a self-custody address usually process in minutes.

What happens if the platform fails

Payward is a private operating company and spot crypto balances carry no FDIC or SIPC protection. The Global Terms of Service say client digital assets are not Kraken’s property, are not loaned to Kraken and are not subject to its creditors’ claims. That is the language you want and not a guarantee: in a bankruptcy a judge characterises the relationship from the whole record, the question that took years for Celsius and FTX creditors. The exit from platform risk costs one network fee and ten minutes, which is why the withdrawal step appears in every recommendation here.

The forms, the character of the income and the traps, with the Code and ruling references. None of it substitutes for your own preparer.

The character of the income

The IRS treats convertible virtual currency as property, not currency, under Notice 2014-21 (2014). Every disposal is a taxable event: selling for dollars, trading one coin for another, spending crypto on goods. Gain is proceeds less basis, taxed at short-term rates if held a year or less and at long-term rates if held longer. Direct holdings of bitcoin are not collectibles, so the 28% rate under Section 1(h)(4) that reaches physical gold, art and cards does not apply to spot crypto at Kraken, a real advantage over several categories this publication covers.

Staking rewards are ordinary income at fair market value on the date you gain dominion and control over them, per IRS Revenue Ruling 2023-14 (2023). That produces the well-known cash-flow problem: you owe tax in dollars on tokens you did not sell, at a price that may be far above where the token trades when your return is due.

As of September 17, 2026, the wash-sale rule at Section 1091, which disallows a loss when you repurchase substantially identical stock or securities within 30 days, has not been extended by statute to digital assets, which is why crypto tax-loss harvesting has been available in a way stock harvesting is not. Whether that survives the 2026 legislative session is unverified at publication; check before you rely on it.

The forms

For the 2025 tax year, US exchanges began issuing Form 1099-DA, the digital asset broker form. Kraken issues it to any client who sold, traded or otherwise disposed of crypto during the year, with no minimum dollar threshold. For the 2025 tax year, brokers were not required to report cost basis, so the form generally shows gross proceeds only, and reconciling proceeds to basis is your job. The statutory issuance deadline was February 17, 2026; Kraken filed an extension and estimated forms would be ready by mid-March 2026.

CoinDesk reported on April 22, 2026 that Kraken filed 56 million tax forms for 2025: roughly 18.5 million of them, about a third, for amounts below $1, more than half for $10 or less, 74% under $50 and only 8.5% above $600. That is tens of millions of documents for amounts that cannot change anyone’s liability, and it is why a Kraken client with an active year should expect forms that do not match their own records.

Form 1099-MISC arrives separately if you earned $600 or more of ordinary income on Kraken, which for most clients means staking or rewards income.

IRAs, UBTI and state filing

Spot crypto can be held inside a self-directed IRA through a custodian, but not inside a standard Kraken retail account, which has no tax wrapper. Crypto trading gains inside an IRA do not generate unrelated business taxable income, because trading property for your own account is not a trade or business for UBTI purposes; the treatment of staking income inside an IRA is less settled. State treatment generally follows federal, and holding crypto at an exchange triggers no separate state filing, unlike the partnership K-1s that pull investors into multi-state returns on real asset platforms. Kraken produces 1099s, not K-1s, which makes it administratively simpler than most platforms this publication covers.

The risk that ends the investor first, then the dated record.

The risk that ends you

It is not a hack and it is not a fee. It is holding a large, long-term position as an entitlement on a private company’s ledger because withdrawing felt like a chore. Every crypto platform failure of the last five years, from Celsius to FTX to the smaller custodial lenders, converted clients into unsecured creditors overnight, and the clients who had withdrawn to self-custody lost nothing. Kraken is far better run than any of those, and the mechanism of loss is identical.

The second risk is account freeze: compliance reviews, verification escalations and holds can lock an account at the worst moment. That is not fraud, it is the cost of a regulated money services business, and it is the dominant theme in public complaints. The third is pricing on the retail interface: Instant Buy’s spread is disclosed in principle and never in basis points before you press the button.

The regulatory record, dated

September 28, 2021, Commodity Futures Trading Commission. Order against Payward Ventures, Inc. d/b/a Kraken (CFTC Release 8433-21). From approximately June 2020 to July 2021, Kraken offered margined retail commodity transactions to US customers who were not eligible contract participants, acting as an unregistered futures commission merchant. Penalty: $1.25M plus a cease-and-desist. Settled. Commissioner Dawn Stump concurred, describing the theory as uncharted territory.

November 28, 2022, Office of Foreign Assets Control. Settlement over apparent violations of the Iranian Transactions and Sanctions Regulations. Between approximately October 14, 2015 and June 29, 2019, Kraken processed 826 transactions totalling approximately $1,680,577 for users who appeared to be located in Iran, having failed to implement geolocation controls in time. Settlement: $362,158.70, plus a commitment to invest $100,000 in sanctions compliance, against a statutory maximum of roughly $273M that OFAC reduced because Kraken disclosed the violations voluntarily. Settled.

February 9, 2023, Securities and Exchange Commission. Charges against Payward Ventures, Inc. and Payward Trading Ltd. for failing to register the offer and sale of their crypto asset staking-as-a-service programme (SEC Press Release 2023-25). The complaint alleged advertised returns of as much as 21%, US investor assets on the platform worth over $2.7B, and roughly $147M of programme revenue. Settlement: $30M in disgorgement, prejudgment interest and civil penalties, plus immediate cessation of the US programme, without admitting or denying the allegations.

November 20, 2023, Securities and Exchange Commission. Civil complaint against Payward, Inc. and Payward Ventures, Inc. in the Northern District of California, alleging operation as an unregistered securities exchange, broker, dealer and clearing agency. Kraken’s motion to dismiss was denied on August 23, 2024. On March 3, 2025, Kraken announced the SEC had agreed in principle to dismiss with prejudice, with no penalty, no admission and no required business changes; the parties filed a joint stipulation on March 27, 2025. The Commission stated that its decision rested on its judgment that dismissal would facilitate its reform of the agency’s approach to crypto, and not on any assessment of the merits (SEC Litigation Release LR-26278).

Total disclosed US penalties since 2021: $31.61M. Kraken has twice been charged with running a regulated activity without the registration for it, and settled both times. The 2025 dismissal removed the third charge on policy grounds, not on the merits, after a federal judge had already declined to dismiss it. The legal question of whether a US spot crypto exchange must register was never answered; enforcement simply stopped.

Security record

June 2024. Researchers at CertiK exploited a zero-day flaw in Kraken’s on-chain deposit and withdrawal logic and extracted roughly $3M. The funds came from Kraken’s treasury, not from client balances. Kraken patched the bug; the researchers initially declined to return the funds, which Kraken’s chief security officer publicly called extortion; the crypto was eventually returned.

2025. Kraken’s security team identified a North Korean operative applying for a software engineering role, flagged the applicant’s email against a list associated with a state-linked hacking group, and ran the candidate through identity verification traps that the applicant failed. Kraken published the account itself. A firm that detects and publicises a nation-state infiltration attempt at the hiring stage is running a better security programme than one that never mentions the subject.

February 2025 and early 2026, two insider incidents. A threat actor recruited a customer-support employee, and a video showing access to Kraken’s client support systems circulated on a criminal forum. Kraken revoked the access, notified affected clients, and disclosed a second, similar incident in early 2026. Across both, roughly 2,000 client accounts, about 0.02% of the user base, were potentially viewed. Kraken says no systems were breached and no client funds were at risk, and it refused to pay the extortion demand that followed, saying it had evidence to prosecute (BleepingComputer and American Banker, 2026). This is the failure mode to note: not a hacked wallet, but a human being with a support console.

Complaints

All of the following are unverified customer reports and are reported as patterns, not as individual evidence.

Trustpilot rates Kraken 3.2 out of 5 across roughly 8,300 reviews as of September 2026, down from 3.4 across 6,509 reviews in April 2026. Secondary summaries circulating a 54% one-star distribution cannot be reconciled with either average, and we do not use them.

The recurring themes across Trustpilot, the app stores and Reddit are consistent: account freezes, know-your-customer delays, withdrawals blocked during compliance review, unexplained closures and slow ticket response. Positive reviews cite reliability and the breadth of the asset list. The Better Business Bureau profile for Kraken in Cheyenne, Wyoming shows 18 unresolved complaints as of September 2026 on the same themes, difficulty reaching support and accounts suspended without a reply; we could not retrieve a total complaint count. We found no class action or regulatory matter pending as of September 17, 2026 beyond those above; that is a search result, not a docket search.

Two lists, and the thresholds that decide which one you are on.

Kraken is for you if:

• You will place limit orders on Kraken Pro rather than pressing buy in the app. That one behaviour is worth about 3.9 percentage points on a round trip at the entry tier, and 4.4 once you hold $20,000.
• You hold $20,000 or more on the platform, putting you in the 0.22% / 0.38% tier where Kraken is the cheapest large US venue as of September 17, 2026.
• You want more than bitcoin and ether: several hundred listed assets, far wider than a bitcoin-only broker or Gemini.
• You want US futures alongside spot, through the CFTC-registered FCM that came with NinjaTrader in 2025.
• You value the voluntary disclosure: recurring proof of reserves, a published security posture, quarterly financials.

Skip it if:

• You live in New York, where Kraken does not operate, or another restricted state.
• You are investing under $5,000 and will not use the Pro interface. A single Instant Buy round trip costs nearly twenty years of a spot bitcoin ETF’s expense ratio.
• Your holding period is under about 21 months and you only want bitcoin exposure. A spot bitcoin ETF at 0.25% in a brokerage account you already have is cheaper and lands on your existing 1099-B.
• You want the asset inside an IRA or 401(k) without a separate custodian.
• You will not withdraw to self-custody or read the user agreement’s custody terms. Platform failure is the dominant risk for a large holder and the one you control completely.
• You came for xStocks or tokenised equity perpetuals, not offered to US residents.

The same trade priced at six venues plus the plain liquid alternative, as of September 17, 2026.

Table: US retail crypto venues and the liquid alternative, September 17, 2026

Where each reader goes. Buying bitcoin only, holding for years, wanting the coin: River at 1.00% one-time or zero-fee recurring buys is simpler than Kraken and comparable in cost at small size. Buying bitcoin only and indifferent to holding the coin: IBIT in your existing brokerage is the least effort and cheapest for holds under about 21 months. Active trader with five figures in play: Kraken Pro at 0.22% / 0.38% is the best large-venue rate in the United States. Trading small amounts with nothing held: Bitstamp at 0.30% / 0.40% and Crypto.com Exchange at 0.25% / 0.50% undercut Kraken’s entry tier, which was not true before July 9, 2026. Coinbase suits the reader who wants the largest US venue and a listed company’s disclosure, at 10 basis points more. Gemini is the most expensive of the six at entry.

The sequence, and the six documents to read before any money moves.

The sequence

1. Check your state, and whether fiat funding is available there, before you spend time on verification.
2. Open the account and turn on two-factor authentication with an authenticator app or hardware key rather than SMS, before you fund.
3. Complete identity verification. Expect a delay; do not plan a trade around the approval date.
4. Set up a self-custody wallet before you buy anything: a hardware wallet, its recovery phrase on paper offline, and a test withdrawal. If that feels like too much work, buy the ETF instead.
5. Fund by ACH, which is free, and plan the first purchase after the seven-day hold clears.
6. Switch to Kraken Pro, find the pair, and place a limit order slightly inside the spread. Use the market button only when you need immediate execution and have priced the taker fee.
7. Check the fee on the confirmation against the tier you expected. That is how you learn whether your assets-on-platform tier applied.
8. Withdraw. Send a test amount to your own wallet address, confirm receipt, then send the balance you do not intend to trade in the next 30 days.

The six things to read before you wire money

• The fee schedule page, specifically your own tier as the account displays it, not the headline rate in any review including this one. Most published guides are wrong after July 9, 2026.
• The Instant Buy FAQ, for the sentence on how the spread is calculated, so you know the quoted price hides a cost you cannot see as a percentage.
• The user agreement’s custody and insolvency terms, which as of September 2026 say client assets are not Kraken’s property, and the arbitration and class-action-waiver clauses beside them.
• The funding page, for wire fees and the hold periods on your funding method.
• The staking terms, for the commission on your asset and whether the position is bonded with an unbonding period.
• The supported-states page and any product-level restriction where you live.

Kraken earns 3.5 out of 5, and the half point it loses is almost entirely about what happened on July 9, 2026.

For three years the argument for Kraken was easy: the cheapest of the large US venues on the professional order book, a mixed compliance record against a clean operational one, and a proof-of-reserves programme ahead of the field. Two of those three still hold. The security posture, the published infiltration attempt, the recurring attestations and the quarterly disclosure are voluntary and better than the industry norm, and the complaints are about compliance friction rather than missing money, which is the right kind of complaint to have.

What changed is the price at the bottom. Moving the entry tier from 0.25% / 0.40% to 0.40% / 0.80% while introducing an assets-on-platform discount is a deliberate transfer from the small, occasional buyer to the client who leaves a balance on the exchange. For a publication that tells readers to self-custody, that is a fee design pointed the wrong way. It arrived in the same year the IPO slipped twice, revenue went flat at roughly $508M for two quarters and adjusted EBITDA fell from $178.6M in Q3 2025 to $18M and $23M in the first half of 2026.

The verdict, stated as a rule: Kraken Pro is the right venue for a US investor with $20,000 or more in play who will place limit orders and withdraw the surplus. Kraken is the wrong venue for a $1,000 first purchase made through the app, where a spot bitcoin ETF or a bitcoin-only broker is both cheaper and simpler.

What would change the rating

Upward to 4 if Payward completes an IPO and publishes audited financials and a full custody description in a registration statement, if it restores an entry tier at or below 0.25% maker, or if proof of reserves expands to cover fiat and the full asset list rather than eight tokens. Downward to 3 or below if the complaint mix shifts from verification delays to unexplained withdrawal failures, if a new action alleges anything touching client assets rather than registration status, or if the assets-on-platform threshold rises above a balance a retail client should keep on an exchange.

What to watch, with dates

• Any public Form S-1 from Payward, Inc. The confidential filing dates to November 2025 and reporting on September 2, 2026 points to Q2 2027 at the earliest. That filing is the first time an outsider sees audited numbers.
• The next fee schedule change. Check your own tier in the account, not a published guide.
• The next proof of reserves. Attestations run roughly semi-annually; every in-scope asset was at or above 100% on June 30, 2026. Watch the asset coverage list as closely as the ratios.
• Q3 and Q4 2026 results. Two quarters at about $508M of revenue on $18M and $23M of adjusted EBITDA is the flat line; a third would confirm it, and another repricing would follow.
• Cost-basis reporting on Form 1099-DA. The 2025 forms carried proceeds only.
• State availability. New York, Washington and Maine remain closed as of September 17, 2026; a New York BitLicense would widen the addressable market materially.

This review is research, not investment advice. Invest Alternative takes no referral fees from any platform it reviews and holds no position in any of them.