Among the 235 crypto exchanges, Kraken is one of the oldest and is licensed and regulated in around 190 countries across the world, including the United States. Supporting more than 200 cryptocurrencies, including major coins like BTC, ETH, ADA, and more, users in the US can get access to advanced trading tools like margin trading, OTC, and futures with Kraken.
However, some of the exchange’s features might be limited to specific jurisdictions or locations in the United States. This is why it is important to check the availability and legality of Kraken in your state if you are willing to use Kraken for your crypto investments.
With that being said, let’s take a look at the limitations and functionalities of Kraken in the US. We will talk about whether it is available, registered, legal, or taxable in your state in this article.
Is Kraken Crypto Exchange available in the US?
Yes, the Kraken crypto exchange is available for US citizens to buy, sell, and trade cryptocurrencies. Kraken operates in the United States as a Money Services Business (MSB) registered with the Financial Crimes Enforcement Network (FinCEN).
However, there are some restrictions and limitations on this, too. We will look into those later in the article.
Can US citizens use Kraken Crypto Exchange?
US citizens can use the Kraken crypto exchange and get access to all the features and benefits that it offers. Individuals in the United States who want to invest in cryptocurrency are fully open to using Kraken as a crypto exchange.
With a strong reputation for security and reliability, Kraken provides a wide range of tools to enhance the crypto experience of millions of users.
Is it legal to use Kraken in the US?
It is legal for users in the United States to buy, sell, and trade more than 200 cryptocurrencies through Kraken. However, it is important to note that New York and Washington residents may have limited access owing to special regulations.
It is advisable to confirm the availability of Kraken’s services in a certain state, as regulations vary from one state to another. It is important for US citizens to maintain compliance and proceed with caution with their crypto investments.
Is Kraken registered in the US?
Kraken is registered as a Money Services Business with FinCEN in the US, according to its official website. In Wyoming, it also has a special purpose depository institution (SPDI) charter.
Does Kraken report to the IRS?
Yes, Kraken reports to the IRS to show the US Government how much the users earn from crypto selling, buying, or trading on the exchange. Kraken abides by all US IRS legislation. The exchange reports to the IRS if a user earns more than $600 in a year from staking rewards or if they have received more than $10 in interest or other revenue from Kraken.
Kraken officially provides a US Form 1099-MISC, a 1099-INT, and a 1099-NEC, all of which are reported to the US IRS and a copy of which is given to eligible users. If a user got a Form 1099-MISC, Form 1099-NEC, or Form 1099-INT, this information has been submitted to the IRS.
Form 1099-MISC: If a US-based Kraken user earns more than $600 from Kraken from rewards, the exchange issues a 1099-MISC form, and the IRS gets a similar copy.
Form 1099-NEC: If a user is a US person for tax purposes and has earned USD $600 or more from Kraken services in total, Form 1099-NEC is submitted to the IRS.
Form 1099-INT: It is used to report specific interest earned by a Kraken user throughout the course of a year. Only interest on a fiat currency credit is reported on a Form 1099-INT, whereas interest on a crypto credit is documented on a Form 1099-MISC. If a customer or other business associate is a US person for taxable income and has earned USD $10 or more in total, Form 1099-INT is reported to the US IRS.
Why is Kraken better than Coinbase?
Both Coinbase and Kraken are two of the most renowned crypto exchanges in the world. Both of them are preferred by millions of investors and crypto enthusiasts for their features and reputation.
However, if one has to choose, there are multiple factors that indicate that Kraken is better than Coinbase.
How? Here are a few aspects to think about:
Security: When it comes to investing in crypto, security comes at the top of the list. While both exchanges feature necessary security measures like 2FA, encryption, and cold storage, to name a few, Kraken has a track record of never being hacked before.
On the other hand, Coinbase has suffered from breaches in the past. The Coinbase breach refers to a series of occurrences that happened between March and May 2021, during which hackers were capable of gaining access and withdrawing crypto assets from at least 6,000 Coinbase users.
Trading fees: For trades of $50,000 or less, Kraken charges a 0.16% maker fee and a 0.26% taker fee depending on activity during the last 30 days, especially for the advanced traders who use the Pro platform of Kraken. Coinbase, on the other hand, charges from 0% to 3.99%, which varies by the type of transaction made.
Trading features: In terms of features, Kraken also offers more features than Coinbase. Where Coinbase traders can only do spot trading and staking, Kraken offers futures trading, margin trading, and OTC trading.
Kraken Crypto Exchange Supported Countries
Around 190 countries support Kraken, where 9 million users trade, sell, buy, or stake cryptocurrencies. Here is a list of 20 countries among them:
- United States (except New York and Washington)
- United Kingdom
- United Arab Emirates
- South Africa
You can check the full list of countries that support Kraken here.
Kraken Crypto Exchange Banned Countries
Similarly, there are a few countries that have yet to support and legalize Kraken for their citizens to invest in crypto. Some examples are:
- North Korea
Where is Kraken Crypto Exchange regulated?
Kraken is regulated in the United States, along with countries from North America, Europe, Australia, and the Middle East. According to the official website, here’s a breakdown of the countries and regulators worldwide that have been regulating Kraken:
- In the United States, the Financial Crimes Enforcement Network (FinCEN) regulates Kraken as an MSB under the registration number 31000239561651.
- In Canada, the Financial Transactions and Reports Analysis Centre of Canada (FINTRAC) regulates Kraken under the MSB registration number M19343731.
- In the United Kingdom, Kraken is registered with the Financial Conduct Authority (FCA) as a Registered Cryptoasset Firm, which falls under the Money Laundering Regulations.
- In Italy, however, Kraken operates locally as a Virtual Asset Service Provider (VASP) with the Organismo degli Agenti e dei Mediatori (OAM).
- In the United Arab Emirates (Abu Dhabi Global Market), Kraken is registered under a Financial Services Permission (FSP) by FSRA.
- In Australia, Kraken is registered with the Digital Currency Exchange (DCE) by AUSTRAC to conduct local operations.
How do I withdraw from the Kraken Crypto Exchange in the USA?
As per the website, in order to make a withdrawal, there are five simple steps to follow.
Step 1: Sign in to your Kraken account and click the Withdraw button. You can also click on the Transfer button on the home page.
Step 2: In the first dropdown, you will be shown a list prepopulated with the cash available. In this step, choose a different currency if you prefer to take withdrawals in that currency.
Step 3: Choose “Funding Provider” under the Withdrawal Type dropdown.
Step 4: Add your bank account as prompted.
Step 5: Request a withdrawal after reviewing it carefully.