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Is Kraken Safe and Legit for UK Traders? 2025

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

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Quick Answer: Is Kraken Safe?

Yes, Kraken uses cold storage for most assets, mandatory two-factor authentication, and withdrawal confirmations. Independent security audits and proof-of-reserves checks enhance transparency. These layered measures aim to reduce theft or misuse risk, though users remain responsible for protecting login credentials and devices.

Kraken Overview

To ensure it’s accuracy the content of this communication has been prepared by Payward Limited

Kraken has built a reputation for robust security over more than a decade of operation. The platform states that the majority (over 90–95%) of client funds are stored in offline cold wallets spread across multiple secure locations. It also implements encrypted data protection, strict access controls, and mandatory account-level security features. While these measures reduce risk, they do not eliminate it.

What Makes Kraken Secure for UK Users?

Kraken uses cold storage for most assets, mandatory two-factor authentication, and withdrawal confirmations. Independent security audits, ISO/IEC 27001 certification, SOC 2 Type 1, and recurring Proof-of-Reserves reviews enhance transparency. These measures reduce theft risk, though users remain responsible for protecting login credentials and devices.

How Does Kraken Protect Customer Funds?

Client crypto holdings are stored mostly offline in geographically distributed cold wallets. Fiat deposits sit with regulated banking partners under Payward entities with safeguarding. Regular penetration testing and internal monitoring limit unauthorised access, creating a strong but not absolute safeguard for user funds.

Has Kraken Ever Been Hacked?

Since launching in 2013, Kraken reports no confirmed loss of customer assets. In 2024, a zero-day exploit saw roughly $3 million in company funds withdrawn during a bug-bounty dispute; customer balances were unaffected. Security testing continues, but future incidents cannot be completely ruled out.

What Account-Level Security Features Does Kraken Offer?

• Two-factor authentication for logins and withdrawals
• Withdrawal address whitelisting
• Device and session management
• Time-based global lock for account recovery
• Email confirmations for key actions
Together these controls limit unauthorised activity if a password or device becomes compromised.

Does Using Kraken Pro Change Its Security?

Kraken Pro shares the same infrastructure, custody, and compliance framework as the standard interface. Security measures, encryption, and authentication are identical. The difference lies only in trading tools and fee tiers, not in protection standards or custody arrangements for digital or fiat assets.

Is Kraken Legally Compliant in the UK?

Kraken operates through Payward Ltd., registered with the Financial Conduct Authority under the UK Money Laundering Regulations. This registration confirms AML and KYC oversight and reporting obligations. It does not imply financial-services compensation but verifies lawful operation for UK customers.

What Does FCA Registration Mean for Kraken?

FCA registration means Payward Ltd. has met the UK’s anti-money-laundering and counter-terrorist-financing standards. The FCA supervises due diligence and transaction monitoring but does not regulate prices or guarantee protection. Registration confirms legality, not compensation or financial-advice status.

What AML / KYC Standards Does Kraken Follow?

Kraken verifies customer identity using government-issued documents and live-photo checks. Continuous monitoring screens activity against sanctions and suspicious-pattern databases. Transactions breaching thresholds trigger internal reviews and reports to UK authorities, satisfying AML and KYC obligations under current Money Laundering Regulations.

Is Kraken Covered by UK Financial Protection or Insurance?

Kraken’s client funds are not protected by the UK Financial Services Compensation Scheme. Fiat safeguarding applies to e-money under Payward Services Limited; limited insurance may cover specific security incidents only. It does not cover market loss or user error. Users must safeguard account access.

How Does Kraken’s Safety Compare to Other Crypto Exchanges?

Kraken ranks strongly for transparency and long-term uptime. In 2024, global crypto hacks caused losses exceeding USD 2.2 billion, underlining sector risks. Kraken’s record of no major customer-loss event stands out, yet users must apply robust security to benefit from those protections.

Personally, I trust Kraken for trading and short-to-mid-term storage, but when it comes to long-term holding, I still prefer using a hardware wallet. Kraken’s security is excellent, but like any exchange, it’s not immune to risks like government intervention or rare edge-case failures.

For everyday trading, or even holding moderate amounts of crypto over a few months, I feel completely comfortable using Kraken. But when I’m parking large amounts of Bitcoin or Ethereum for the long haul, I transfer it to a cold wallet that I control.

Is Kraken Safer Than Binance, Coinbase, etc.?

In the UK, Kraken offers regulatory visibility through Payward Ltd. Binance’s retail promotions face FCA limits. Coinbase UK is also registered. Kraken’s conservative listing policy and security record are advantages, but all exchanges share systemic crypto-market risks beyond their control.

Platform	FCA Registered	Cold Storage	Insurance	Bug Bounty	Hack History
Kraken	✅	95%+	✅	✅	❌ Never
Binance UK	✅	90%+	Partial	✅	❌ Partial
Coinbase	✅	98%+	✅	✅	✅ (2021 + 2025 breach reported)

*No significant hack reported to date.

What do UK Users Say About Kraken?

When I talk to other traders or scroll through review sites, Kraken almost always gets high praise for its security measures. People appreciate the platform’s stability, the thoroughness of its login protections, and the clarity of their fee structure. It’s the kind of platform that attracts traders who prioritise long-term safety over flashy tokens or low fees.

Can I Trust Kraken for Long-Term Storage of Crypto?

Kraken maintains the majority of customer assets offline in multisignature wallets. Long-term storage remains safer in user-controlled hardware wallets, as exchanges cannot remove all counterparty risk. Kraken’s custody systems mitigate operational risk but cannot eliminate regulatory or systemic crypto-market exposure.

it is our recommendation that individuals take responsibility for the security of their Crypto Investments. For more on this see our page on The Best Crypto Wallets.

How Does Kraken’s Cold Storage Work?

Cold wallets are disconnected from the internet, geographically separated, and require multiple key approvals for movement. Only a small liquidity reserve stays online for withdrawals. This setup reduces hacking exposure while maintaining service continuity for verified UK customers.

What Risks Remain When Holding Crypto on Kraken?

• Market volatility can erode value
• Platform access may pause under stress
• Regulatory changes could affect service availability
• User device compromise risks account loss

Cold storage limits theft risk but does not protect against market or jurisdictional uncertainty.

Kraken provides users with tools that help to stay safe, it’s up to you to use them.

Is Kraken’s App & Web Platform Secure for Daily Use?

Yes, I’ve found that whether I’m trading on my phone or checking charts on my laptop, I can feel confident knowing Kraken has layered protections built in.

Kraken’s apps and web interface use modern TLS encryption, hardware-backed key storage, and timed logout features. Continuous monitoring flags suspicious logins. Users enhance safety by enabling biometrics and using unique passwords. Regular updates maintain device-level resilience against malware or phishing attacks.

How Safe Is the Kraken Mobile App?

The mobile app encrypts API traffic, supports biometric unlock, and restricts withdrawal approvals to verified sessions. Sensitive operations require password plus two-factor code. App-store updates close known vulnerabilities quickly. As with all wallets, phone security hygiene remains essential.

What Browser & Session Security Controls Exist?

Browser sessions use TLS encryption and device-fingerprint verification. Users can review recent logins and terminate sessions remotely. Optional global lock prevents withdrawals for a timed period. These features protect active web users from phishing or session-hijacking attempts.

How Does Kraken Handle Security-Related Support?

Security issues route to Kraken’s 24-hour specialist team. Confirmed threats trigger account lockdown and verification before reopening. The team never requests passwords or 2FA codes. This controlled process slows recovery slightly but protects accounts from social-engineering attacks.

What Should UK Investors Know Before Using Kraken?

Kraken complies with UK AML law but crypto remains largely outside traditional consumer-protection regimes. Values can drop sharply, and losses are not insured. Beginners should start small, enable all security options, and understand withdrawal processes before trading or holding digital assets.

What Are the Main Risks of Using Any Crypto Exchange?

• Price volatility
• Counterparty or operational failure
• Regulatory or access restrictions
• Personal security lapses
These risks apply industry-wide, not only to Kraken. Awareness and secure-storage practices remain essential for all digital-asset investors.

Does Kraken’s Version (Pro / Standard) Impact Risk Perception?

Both versions share identical security and custody infrastructure. Kraken Pro simply offers advanced charts and lower fees. Risk differences arise from user behaviour—higher-frequency traders face greater exposure to volatility, while casual investors may prefer the simplified standard interface.

Final Verdict

If you’re in the UK and take crypto safety seriously, Kraken is absolutely one of the best and safest exchange options out there. I’ve been using it for years, and I’ve never had a moment where I felt exposed or unsure about the safety of my funds.

Cybersecurity for digital currency is not just about avoiding hacks; it is about using a platform that takes your safety as seriously as you do. Kraken gives me control over my security settings, provides real-time alerts, and gives me the peace of mind knowing that my funds are well-protected.

For trading or just holding coins securely for a while, I’d recommend Kraken.

For more detail see our Kraken UK Review.

Buy and Sell Crypto Securely

Don’t invest unless you’re prepared to lose all the money you invest. This is a high-risk investment and you should not expect to be protected if something goes wrong. Take 2 mins to learn more.

FAQs

Is Kraken safe for long-term crypto storage?

Kraken is secure for short-to-mid-term storage, but for long-term holdings, use a hardware wallet.

What security features does Kraken offer?

Kraken provides two-factor authentication (2FA), global settings lock, withdrawal whitelisting, session monitoring, and runs a public bug bounty program.

How does Kraken compare to other UK crypto exchanges?

Kraken stands out for its clean hack history, robust compliance programs, insurance cover, and strong user protections, often outperforming other platforms.

Update to “robust compliance programs”

Update to “other platforms”

Is the Kraken app safe to use?

Yes, Kraken’s mobile app includes biometric login, device management, and encrypted data protection. It’s one of the most secure crypto apps I’ve used.

Does Kraken offer insurance for crypto assets?

Kraken maintains insurance for exchange-level breaches but not for user-side issues like phishing, lost passwords, or SIM-swapping attacks.

References

Kraken Support – Security Features
FCA – Financial Services Register: Crypto Facilities Ltd.
Kraken Blog – Commitment to Security
Reddit – r/UKCrypto: User Experiences with Kraken
Ledger Academy – Cold Storage vs. Exchange Storage
Kraken Bug Bounty Program – HackerOne