Choosing a trustworthy cryptocurrency exchange is essential for protecting your digital assets. With scams and unregulated platforms on the rise, users must be cautious when selecting where to trade. Among the growing list of popular exchanges, Kraken has attracted significant attention from UK-based traders. But is Kraken legal in the UK? And more importantly, is it safe to use?
This comprehensive review dives into Kraken’s regulatory status, security features, trading offerings, and compliance with UK financial standards—so you can make an informed decision.
Is Kraken Legal in the UK?
Yes, Kraken is legal and accessible to users in the United Kingdom. While it does not hold a traditional financial license issued by the Financial Conduct Authority (FCA) for crypto trading services, it operates in full compliance with UK regulations.
Since January 2020, all cryptocurrency firms offering services in the UK must register with the FCA under the Anti-Money Laundering and Counter-Terrorist Financing (AML/CFT) regime. Kraken has completed this registration and meets the required standards for customer verification, transaction monitoring, and reporting suspicious activities.
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It's important to clarify that the FCA does not currently issue "licenses" for crypto-to-crypto trading platforms like traditional stockbrokers. Instead, it mandates registration under AML rules. Kraken is fully registered, meaning it is legally permitted to serve UK customers.
Additionally, Kraken holds Tier-1 regulatory approvals in other major jurisdictions, including:
- U.S. FinCEN (Money Services Business registration)
- Canada FINTRAC
- Regulated entities in Germany, France, Spain, Italy, and Cyprus
This global regulatory footprint reinforces its legitimacy and operational transparency.
Kraken’s Security Measures: Is It Safe?
Security is one of the most critical factors when choosing a crypto exchange. Kraken has built a strong reputation over more than a decade of operation—with no successful major hacks reported to date.
Here are the key security features Kraken employs:
- ✅ Two-Factor Authentication (2FA) – Required for all accounts
- ✅ KYC Verification – Mandatory identity checks to prevent fraud
- ✅ Cold Wallet Storage – Over 95% of user funds stored offline
- ✅ Proof of Reserves – Transparent audits verifying asset backing
- ✅ DDoS Protection & Monitoring – Advanced infrastructure defense
While Kraken does not currently offer an investor protection fund, its long-standing track record and cold storage protocols significantly reduce risk.
Compared to competitors like Bybit and MEXC, Kraken stands out for its Tier-1 regulation and absence of past breaches—making it one of the safer choices in the market.
What Can You Trade on Kraken?
Kraken offers a robust suite of trading options suitable for both beginners and advanced traders.
Supported Assets
- Cryptocurrencies: Bitcoin (BTC), Ethereum (ETH), Cardano (ADA), XRP, Solana (SOL), and over 200 others
- Stablecoins: USDT, USDC, DAI
- Fiat Currencies: GBP, USD, EUR, CAD, JPY, CHF, AUD
Trading Features
- Spot Trading – Buy and sell instantly
- Margin Trading – Up to 5x leverage
- Futures Contracts – Up to 50x leverage
- Indices & Staking – Earn rewards on held assets
- Kraken Pro Platform – Low-latency trading interface
Kraken also provides educational resources such as market analysis, video tutorials, and a detailed knowledge base—ideal for users looking to improve their trading skills.
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Fees and Costs on Kraken
One of Kraken’s biggest advantages is its competitive fee structure.
| Trading Type | Fee Range |
|---|---|
| Maker Fees | 0.00% – 0.26% |
| Taker Fees | 0.10% – 0.26% |
Fees decrease based on your monthly trading volume. There is no minimum deposit requirement—users can start with as little as $1.
Withdrawal fees vary by currency but are generally in line with industry averages. The platform also offers free internal transfers between Kraken users.
Pros and Cons of Using Kraken in the UK
✅ Advantages
- Fully compliant with UK AML regulations
- No history of successful cyberattacks
- Wide range of cryptocurrencies and fiat support
- High liquidity across major trading pairs
- Advanced trading tools including futures and margin
- Transparent fee model with volume discounts
- Strong educational content for new traders
❌ Limitations
- No dedicated phone support or call center
- Does not offer copy-trading or managed investment programs
- Limited presence in some local banking integrations
Despite these drawbacks, Kraken remains a top-tier choice for UK traders prioritizing security and reliability.
Taxation of Crypto in the UK
In the UK, cryptocurrencies are treated as assets, not legal tender. This means any profits from buying, selling, or trading crypto are subject to Capital Gains Tax (CGT).
As of 2025:
- The annual tax-free allowance is £6,000
- Gains above this threshold are taxed at either 10% (basic rate) or 20% (higher rate) depending on income
Traders must keep accurate records of transactions. Kraken allows users to export full trade histories in CSV format—making tax reporting easier when using accounting software or consulting a professional.
Frequently Asked Questions (FAQ)
Q: Can I legally use Kraken if it doesn’t have an FCA license?
A: Yes. The FCA doesn’t issue licenses for crypto exchanges to offer trading services. However, Kraken is registered under the FCA’s AML/CFT framework, which is mandatory—and it complies fully.
Q: Has Kraken ever been hacked?
A: No. Kraken has never suffered a successful breach of its core systems. Its security infrastructure has withstood numerous attempts over the years.
Q: Does Kraken report user data to the UK government?
A: Yes. As part of its AML obligations, Kraken collects KYC information and may share data with authorities if required by law.
Q: Is my money protected if Kraken goes bankrupt?
A: Unlike traditional banks, crypto exchanges are not covered by the Financial Services Compensation Scheme (FSCS). However, cold storage and proof-of-reserves practices help safeguard assets.
Q: Can I stake crypto on Kraken?
A: Yes. Kraken supports staking for several proof-of-stake coins like ETH, ADA, SOL, and DOT—allowing users to earn passive income directly on the platform.
Q: Are there alternatives to Kraken in the UK?
A: Yes. Other FCA-registered platforms include Coinbase, Binance (UK), and eToro—but each varies in regulation level, fees, and product offerings.
Final Verdict: Should You Use Kraken in the UK?
Yes—Kraken is a safe, legal, and reliable option for UK-based cryptocurrency traders.
Its combination of strong security practices, regulatory compliance across multiple jurisdictions, low fees, and diverse trading tools makes it a standout platform. While it lacks phone support and FSCS protection, its decade-long incident-free operation speaks volumes about its trustworthiness.
For UK users seeking a secure gateway to the crypto market—whether for spot trading, staking, or futures—Kraken remains a top contender in 2025.
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