Is Kraken Safe? A Thorough Analysis

A friend tells you Kraken is a good place to start if you’re new to crypto. It sounds tempting, but you hesitate because stories of exchanges collapsing and people losing funds are still fresh in your mind. So you open a new Google tab and type in the question: “Is Kraken safe to use for trading crypto?”

That kind of doubt is normal, and honestly, I applaud you for being cautious. Just because your best friend swears by a platform doesn't mean you should go all in without checking things for yourself.

So before you spend the pocket money your grandma gave you last Christmas on some funny meme coins, let's break down how safe is Kraken and how you can make the most of its security features.

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Is Kraken Safe for Trading Crypto?

Actually, yes, Kraken is safe to use whether you're just starting out or already a pro. In fact, a lot of people in the community even see it as one of the safest exchanges in the crypto space.

It’s been around since 2011, which in crypto years is practically ancient. Over time, it’s built a solid reputation for prioritizing security and staying compliant with regulators.

And while other platforms have blown up in the news for the wrong reasons, Kraken hasn't had that kind of meltdown (well, there was a thing in 2024, but that one's got some nuance and I'll get to it later).

That near-spotless run is why around 15 million traders across 190+ countries see it as a place they can trust with their funds.

As Kraken itself put it:

Industry-leading security protects your investments.

And to be fair, that line carries more weight than just marketing talk. Kraken’s longevity and reputation are built on some pretty strong security foundations.

If you’re wondering how safe is Kraken and what the platform does to prove it, let’s analyze the core pillars that support its security.

📚 Check Out: Kraken Review

Kraken Security Frameworks

Kraken breaks its safety framework into five main areas: a dedicated security team, proof of reserves (PoR), custody security, information security, and ongoing security testing.

✓ Security Team

Kraken backs its safety claims with a dedicated group called Kraken Security Labs. It’s basically their in-house task force of security professionals, set up to spot risks and strengthen the exchange before problems turn into headlines.

The team isn’t just made up of random hires, though. According to Kraken, many team members have decades of experience building security programs for major global brands, investigating large-scale data breaches, and developing tools used across the industry.

Instead of staying inward-facing, they also take on a broader role in crypto by:

• Testing common third-party products and services;
• Working with vendors to fix discovered issues;
• Sharing their findings to keep the broader crypto community informed.

Over the years, this team has uncovered and helped fix vulnerabilities across the wider industry. I’d say they deserve much of the credit for keeping Kraken clear of major incidents, which makes their “world-class” title feel earned.

✓ Security Testing

Of course, a strong team doesn’t mean much unless they’re constantly putting their systems under pressure. That’s where security testing comes in.

Kraken’s team spends a lot of time trying to break their own platform before anyone else can. They run internal stress tests, throwing every attack scenario they can think of at the platform to uncover weak spots and patch them fast.

On top of that, Kraken runs a bug bounty program, an open invitation for ethical hackers, researchers, and developers to poke around their security system.^[1] If they find a vulnerability and report it responsibly, Kraken rewards them.

Remember that “2024 thing” I mentioned earlier? Well, that incident is related to this program.

So long story short, a group of researchers discovered a flaw that let them inflate balances and withdraw about $3 million. Instead of reporting it right away, they actually pulled the funds, claiming it was part of their “test”.

Kraken disagreed, patched the issue in under an hour, and confirmed that no customer funds were ever at risk. Most of the money was returned, and the story blew up in the news.

The key takeaway isn’t the drama, but how Kraken handled it. They acted quickly, stayed transparent, and kept customer funds safe. I think this incident highlights why Kraken is safe, proving the platform can respond effectively and professionally when it matters most.

✓ Information Security

Kraken takes information security seriously, with multiple layers in place to keep your account and personal data locked down. All sensitive information is encrypted at rest (both at the system and data levels), and access is tightly controlled and monitored.

On top of that, Kraken also holds ISO/IEC 27001:2013 certification and has completed a SOC 2, Type 1 exam. That means independent auditors have confirmed its security practices meet globally recognized standards.

The same level of security applies internally. Every Kraken employee uses company-issued laptops and mobile devices. Storage is fully encrypted and passphrase-protected, and only managed devices can access internal systems.

Even then, hardware-based authentication is required, especially when accessing systems that handle client data.

A globally distributed security team monitors Kraken’s network around the clock. They also scan the wider internet for phishing sites, fake social media accounts, and scams targeting users. If anything suspicious shows up, the team investigates, responds, and shuts it down before it can spread.

✓ Custody Security

To secure customer funds, Kraken uses a combination of cold storage and hot wallets. The majority of crypto is kept in cold storage, completely offline, which makes it much harder for hackers to access.

Only a small portion of funds is kept in hot wallets. While being online makes them more exposed, this setup ensures withdrawals and daily transactions run smoothly. The rest sits in cold storage, striking the industry-standard balance^[2] between strong security and convenient access to your funds.

With this setup, I’d say yes if someone asked, "Is Kraken Wallet safe to store assets?"

Beyond digital security, Kraken also locks down its physical infrastructure. The systems are housed in secure cages, guarded around the clock with 24/7 surveillance, alarms, video monitoring, and armed personnel.

Sounds pretty intense, but I think the whole point is to show that Kraken wants to make it insanely hard for anyone to physically get near the hardware holding customer funds.

✓ Proof of Reserves

Cold storage and armed guards are one thing, but how do you actually know how safe is Kraken when it comes to holding the assets it claims? PoR provides that assurance.

In simple terms, a PoR is an independent audit that checks whether Kraken really has custody of the coins it says it does. An outside accounting firm takes an anonymized snapshot of all customer balances and rolls them into what’s called a Merkle tree.

Here’s what Kraken’s PoR review covers:

• Spot balances
• Staking balances
• Margin trading
• Futures balances

The important part is that you’re not just taking it on faith that the Kraken exchange is safe. You can log in to your account and verify for yourself that your balances were included in the review.

Kraken Account-Level Security

Those five pillars form the backbone of Kraken’s overall safety, covering everything from the infrastructure to how funds are stored. But when it comes to your personal account, the focus shifts to the features you can use day to day.

Some protections run in the background without you needing to do anything. Others are tools you can activate to make your account as secure as possible.

Let's take a look.

✓ Login Protection

The first line of defense is blocking anyone from sneaking into your account. Instead of outdated SMS codes, Kraken uses FIDO2-compliant two-factor verification (2FA) with passkeys. Since SIM-swap scams are a common way hackers hijack accounts,^[3] switching to passkeys is a smart move that shuts that method down.

You’ll also notice Kraken doesn’t allow account resets via phone number. While that might seem inconvenient at first, it’s a deliberate choice. It means no one can sweet-talk your mobile carrier into hijacking your account.

And for those of us who forget tabs open or leave accounts signed in on shared devices, there’s a customizable timeout set. It logs you out automatically after a set period. Slightly annoying at times, sure, but I think it’s better than someone wandering into your account when you’re not looking.

✓ Withdrawals & API Controls

Kraken adds a few speed bumps that make it a lot harder for funds to disappear without your permission. For starters, any new withdrawal address has to be confirmed by email before it becomes active. Add a withdrawal whitelist, and only pre-approved addresses can be used.

If you’re using bots or third-party tools, Kraken’s API controls are surprisingly detailed. You can assign custom permissions and even lock API keys to specific addresses.

And then there’s the DEFCON-5 option: Global Settings Lock (GSL). Turn it on, and no one can change withdrawal settings or view sensitive info until the lock period ends. It might seem like overkill for casual traders, but if you want maximum control and peace of mind, this is the feature to use.

✓ Communication & Monitoring

To keep communication secure, Kraken uses PGP-signed and encrypted emails for anything official. This setup helps you confirm the message is legit and not some scammer trying to phish you.

The security team is also constantly scanning for suspicious activity behind the scenes. If something looks off, like a strange login location or an unusual withdrawal pattern, alarms go off and you’ll be notified quickly.

And if things ever get messy, there’s around-the-clock support. You can reach live chat or email 24/7, with urgent cases pushed to the front of the line.

Well, no one wants to deal with support during a security scare. But I think it’s reassuring to know there’s a real person ready to step in if you ever need help.

✓ Data & Transaction Safety

Kraken also works to keep the technical side of your account locked down. All traffic runs over SSL encryption, so your connection can’t be hijacked while you're browsing.

Sensitive data like personal info and transaction details is also fully encrypted, both at rest and in transit. Even if someone got their hands on the files, they wouldn’t be able to read them.

On the trading side, Kraken removes the risk of chargeback fraud by running on a zero-settlement model. Once your trade clears, it is final. You can’t undo it like a credit-card charge.

Is Kraken safe for beginners and seasoned traders alike?

Looking at these features, most of which you can use without much effort, I'd say yes. The platform gives traders at any level the tools to keep their accounts secure.

Still, none of this means you can sit back and let Kraken handle everything. The tools are there, but it’s up to you to use them if you want your account as secure as possible.

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How to Use Kraken Security Features

I’ve walked you through the many tools Kraken has to keep your account and crypto assets safe. But the thing is, those features won’t do much if you leave them off. It’s still up to you to turn them on and use them effectively.

So before you can confidently answer, "Is Kraken exchange safe?" for yourself, you need to know how to use the protections available. The good news is, most of them are simple to set up, and once they’re in place, you’ll barely have to think about them again.

Enabling 2FA for Safer Logins

A strong password is a good start, but your login gets way more secure once you add 2FA. With this enabled, anyone trying to sign in will need your username, password, and a passcode generated in your authenticator app, making break-ins much harder.

Here’s how to set it up:

Once confirmed, your authenticator app will show as "active" for sign-in 2FA.

I personally suggest enabling more than one 2FA method. You can mix hardware keys, passkeys stored in a password manager, or device-specific passkeys bound to a single browser. That way, if one option is lost or unavailable, you’ve still got another way in.

Activating Master Key

With the 2FA set up, you might wonder, “Does that mean Kraken is safe to use now?”. Safer, definitely, but I wouldn’t call it foolproof. It’s always smart to have a backup in case something goes sideways.

That’s why I recommend activating the master key right after setting up your 2FA. It serves as a fallback that prevents unauthorized password resets, even if your email gets compromised or you lose access to your authenticator app.

Follow these steps to set it up:

• Passkey. Uses your device lock (fingerprint, face, or PIN).
• Authenticator app. Generates one-time codes like standard 2FA.
• Password. A static password stored securely offline (must be different from your regular login password).

Then follow the on-screen instructions for your selected method.

Once it’s active, the master key gives you a way back into your account if you lose access to your main 2FA method.

Just make sure to store it separately from your usual login info. If you use a hardware key to sign in, choose a different method for your master key (like an authenticator app or a second hardware key). Keeping them together defeats the whole point of having a backup.

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Turning On Global Settings Lock

If 2FA is your lock and the master key is your spare, then GSL is the deadbolt. It’s the last line of defense, blocking anyone from making changes to your account or viewing sensitive information if your password and 2FA ever get compromised.

Once GSL is activated, a lot of account settings will be locked. You won’t be able to change your password, update 2FA, or add new withdrawal addresses until the timer runs out. If someone tries to disable it, you’ll get an email alert, and the delay gives you time to respond before anything important is changed.

Setting Up PGP For Kraken Emails

You can secure your login and withdrawals, but one fake “Kraken support” email could still cause serious damage. To reduce that risk, the platform lets you verify official messages using PGP encryption.

Enabling this feature ensures the emails truly come from Kraken and haven’t been tampered with before reaching your inbox. Here’s how:

And that’s it! Kraken will now encrypt all automated account notifications using your public key. Just note that company updates and marketing emails won’t be encrypted, but they’ll still be signed with Kraken’s official public key.

Are Kraken’s Other Products Safe?

After going through the features and how you can use them, I think it’s fair to say Kraken is safe to use for trading crypto. But you’ve probably noticed there are other products in the ecosystem too, like Kraken Pro and the Kraken Wallet.

Naturally, that raises another question: are those safe to use as well? Well, let’s take a closer look.

Is Kraken Pro Safe?

Kraken Pro runs on the same infrastructure as the main exchange. The same security framework and features you've seen, from custody protection and PoR to the professional security team behind the scenes, all apply here as well.

The difference lies in the interface and tools. Kraken Pro is designed for traders who want more advanced options, like custom layouts, derivatives trading, and complex order types. But when it comes to security, nothing changes.

So just like Kraken is safe for beginners, Kraken Pro is safe for more experienced traders who need extra tools without giving up any of the protections.

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Is Kraken Wallet Safe?

Kraken Wallet is safe in the sense that it relies on the same security pillars as the rest of the ecosystem. You still benefit from strong encryption, secure infrastructure, and account-level protections.

What makes it different is that Kraken Wallet is self-custodial. That means you alone are responsible for your private keys. It gives you freedom and control, but it also means the safety of your assets depends heavily on how careful you are.

So yes, the wallet is secure, but in a different way. The technology keeps your assets protected, but the ultimate responsibility falls on you.

📚 Check Out: Kraken Wallet Review

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Conclusions

So, is Kraken safe? Looking at its security framework, the account-level features, and its track record, I’d say yes. In fact, I’d even go as far as to say it might be one of the safest crypto platforms on the market.

But then again, no exchange can protect you from everything. Yes, Kraken crypto is safe, but the rest also comes down to you to take advantage of the available security features, apply good crypto habits, and carefully manage how you store your funds.

The content published on this website is not aimed to give any kind of financial, investment, trading, or any other form of advice. BitDegree.org does not endorse or suggest you to buy, sell or hold any kind of cryptocurrency. Before making financial investment decisions, do consult your financial advisor.

Scientific References

1. Arshad J., Talha M., Saleem B., Shah Z., Zaman H., Muhammad Z.: ‘A Survey of Bug Bounty Programs in Strengthening Cybersecurity and Privacy in the Blockchain Industry’;

2. Houy S., Schmid P., Bartel A.: ‘Security Aspects of Cryptocurrency Wallets A Systematic Literature Review’;

3. Reinheimer B. M., Aldag L., Mayer P., Mossano M., Düzgün R., Lofthouse B., Landesberger T. von, Volkamer M.: ‘An Investigation of Phishing Awareness and Education Over Time When and How to Best Remind Users’.