Choosing the right cryptocurrency exchange that meets your investment needs is crucial. Whether you are buying, selling, or just trading, each exchange has its own sets of differences that might be more important depending on what you are trying to do. To compare the differences between two of the most common crypto exchanges, read our full Kraken vs Poloniex guide so you can pick one that fits you.
Kraken and Poloniex have had completely different growth trajectories. Kraken has managed to retain ownership and upper management of the exchange since inception in 2011. Market conditions have seen floods and droughts of traders and investors flock to and away from both exchanges. Choosing the best exchange is important
Poloniex, on the other hand, has changed owners many times since inception in January 2014. To their credit, they did manage to stay afloat despite losing +/- 98% of their global exchange trading volume. Plagued by regulators and delistings, they effectively drove their trading volume down to where it is today.
Like a phoenix, Poloniex seems to be rising from the ashes, pushing towards a new life. They have lifted KYC bans, banned American traders and investors and have added a fresh round of coins. The TRXMarket has been rebranded Poloni DEX. Poloni DEX has offered free listing for all TRX-20 tokens.
Kraken, on the other hand, has very stringent verification processes that defy the purpose of the crypto ethos. Kraken has margin trading for United States citizens, which makes it palatable for public disclosure. Security and coin safety trumps everything in the world of crypto.
Kraken vs Poloniex Comparison Table
|Our Rating: 5||Our Rating: 5|
|Company Luanch: 2011||Company Luanch: 2012|
|Company Location: San Francisco, CA||Company Location: Seychelles|
|Exchange Type: Global Spot and Global Margin Cryptocurrency Exchange including the U.S.||Exchange Type: Global Spot, and Non-U.S. Margin Cryptocurrency Exchange|
|Available Cryptocurrencies: 32||Available Cryptocurrencies: 49|
|Trading Pairs: 131||Trading Pairs: 100|
|Buy/Deposit Method: Cryptocurrency, Bank transfer||Buy/Deposit Method: Credit Card, Cryptocurrency|
|Sell/Withdrawal Method: Bank transfer, Cryptocurrency||Sell/Withdrawal Method: Cryptocurrency|
|Fees: Low||Fees: Lower|
|Security: Excellent||Security: Great|
|Community Trust: Great||Community Trust: Great|
|Verification Required: Yes||Verification Required: No|
|Customer Support: Good||Customer Support: Good|
|Mobile App: No||Mobile App: Yes|
|Beginner Friendly: No||Beginner Friendly: No|
What is Kraken?
Kraken is a crypto exchange founded by Jesse Powell in July 2011. Jesse Powell worked at Mt. Gox, he felt the exchange landscape could be improved with properly implemented security controls and improved customer experience. To date, the Kraken Exchange has not experienced a single hack since its inception. Their customer experience was strained due to the volume of users in 2017 but in stable markets, their customer services are prompt. Kraken is located in San Francisco, California.
Kraken is at the front end of bringing Cryptocurrencies to the institutional masses. They were the first crypto exchange to have their trading data displayed on Bloomberg Terminals. Kraken is also at the forefront with regulation as the Tokyo Government court-appointed Trustee and Germany’s BaFin regulated Fidor Bank.
Kraken was one of the first Cryptocurrency exchanges to offer a leveraged margin to the crypto community and U.S. Citizens. It is also the first Cryptocurrency exchange to pass a cryptographically verifiable proof-of-reserves audit.
Kraken investors include Blockchain Capital, Digital Currency Group, Hummingbird Ventures, Money Partners Group, and SBI Investment.
What is Poloniex?
Poloniex is a Cryptocurrency exchange founded by Tristan D’Agosta in 2014. Under his supervision, the exchange managed to secure 50+ % of global exchange trading volume.
Poloniex had a diverse offering of altcoins, no KYC was needed if the account holder didn’t mind a maximum withdrawal of $2000 per day. Lending and margin trading was available to everyone. They accomplished this by being a Crypto to Crypto exchange and not being an onramp which dealt in fiat.
On the 26th of February 2018, Circle announced they would purchase Poloniex Cryptocurrency exchange for the sum of $400 million. This started the downward spiral for the exchange and Circle. 2018 was an interesting year for Poloniex, they began a delisting spree and required full KYC to trade on their platform due to regulatory compliance. Poloniex also had to close its margin trading and lending services to US citizens. Circle moved the exchanges legal location from Delaware to Bermuda.
Poloniex was then split from Circle to create Polo Digital Assets, Ltd in October 2019. At this time the exchange had little more than 1% of the global exchange-traded volume. Justin Sun, founder of the Tron TRX crypto platform, and an unnamed Asian investment firm acquired Poloniex for $400 million. Circle effectively wasted 18 months to break even on their investment, this was a monumental loss for Circle and saw the unwinding of their stability.
Circle's co-CEO Sean Neville, stepped down but he will remain as an independent director on the Circle board. He will also continue to collaborate with Circle and Coinbase on the USDC stable coin project. The circle had to lay off 40 employees from May 2019, 30 employees were laid off before the Poloniex was sold and 10 were laid off after the co-CEO stepped down.
To be fair, Circle did improve the exchange considerably, improving support and building a mobile app, while dealing with regulatory concerns. Unfortunately, they bought the top of the 2017 bull market and had to suffer a monster bear market, from the start of 2018 through to the end of 2019. What makes the sale even worse as they went on to capitulate at the bottom of the market.
All Americans are banned from Poloniex as of 1 November 2019. Poloniex has shifted from a Global Cryptocurrency exchange to an American cryptocurrency exchange and back to a Global cryptocurrency exchange with a strong push for the Chinese market. Chinese Investors and traders can access Poloniex from pwang.com, a redirect website to get Chinese traders and investors onto the exchange. Poloniex will also accept Chinese identity documents.
The new owners plan to spend $100 million on developing and improving the exchange with 100 plus full-time employees. To start their new Poloniex and return the exchange to its former glory. They reduced all spot fees to 0% from the 21st October 2019 until the 31st of December 2019 to get traders and investors back onto the platform, as well as lifting non-KYC banned accounts. All non-KYC accounts can withdraw $10,000.00 per day, non-KYC accounts cannot margin trade. Poloniex is now located in Seychelles, as such the private investor firm details are not available.
Kraken vs Poloniex: Reviews
Kraken systems are designed for the major leagues of trading and investing. Their systems are stacked with security features that have been built in to force user security.
While Kraken's history of support is poor to average at best, they still respond to tickets/user complaints or issues. They have done a lot to work on this and their recent stats show improvement.
Kraken has reasonable leverage of up to 5x of your account balance. Professional pit traders think 4x is gambling not trading, and most professional forex traders keep margin limits at 10x. Kraken has double the margin trading ability of Poloniex at 2.5x.
You can margin trade the following assets on Kraken; Bitcoin (BTC), Ethereum (ETH), Tether (USDT) Monero (XMR), Ethereum Classic (ETC), Augur (REP), Ripple (XRP), and Bitcoin Cash (BCH)
Kraken uses Cryptowatch for its charting services. While it doesn't compare well against Tradingview in programmability or Coinigy for the total number of exchanges, the Cryptowatch service is still excellent and easily tradable. All of Krakens' assets can be charted on Tradingview or Coinigy. An investor or trader could also trade all the assets using Coinigy’s API.
Cryptocurrency exchanges have always been scary to trade on. Will scheduled maintenance be the last time you see a positive account balance? Poloniex systems, in their current state, are something traders and investors seriously need to think about.
On the 30th of December 2019 Poloniex announced A data leak of 5.5% of their users' emails and passwords (this could just be user error, end users are known to reuse the same password everywhere and generally use one email address for everything), this is allegedly linked to another exchange being compromised.
On the 12th of February 2020 between 17:53 UTC and 18:05 UTC, a bug occurred in the exchanges order execution code. Poloniex's response was to reverse every trade that took place and freeze withdrawals. We agree with freezing withdrawals to protect traders and investor's funds in case of a hack.
Most responsible and accountable exchanges take the financial loss of bad code with an insurance fund. Not financially harming victims of the bug but also rewarding traders who were lucky enough to profit, this is what happened with GDAX and the Ethereum Flash Crash (this was not faulty code but market conditions, nevertheless, the standard and president was set).
Poloniex has been actively seeking to bring back traders. With 3 airdrop campaigns of USDT and TRX20. The TRXMarket was rebranded into Poloni DEX which controls the largest decentralized Tron TRX marketplace. They lifted the ban on all non-KYC accounts and implemented a maximum withdrawal limit of $10,000 for non-KYC accounts. Implementing pwang.com for people in china to use Poloniex was a masterstroke.
Poloniex’s history of support is worse than Kraken due to their size, at one point they had 50+% of the global exchange volume, which is a tall order for any Cryptocurrency Exchange. They have improved their services under Circle and a lot of exchange frustration has been removed by non-KYC accounts. We suspect most of the issues came from non-KYC accounts in the 2017 bull market but only time will tell if this will be an issue again for them.
Poloniex has limited leverage of up to 2.5x of your account balance but they have a better coin selection. You can margin trade on the following assets on Poloniex; Bitcoin (BTC), Ethereum (ETH), Tether (USDT), USD Coin (USDC), Monero (XMR), Ethereum Classic (ETC), Litecoin (LTC), Ripple (XRP), and Bitcoin Cash (BCHABC), Bitcoin SV (BCHSV), Dash (DASH), Cosmos (ATOM), Stellar (STR), EOS (EOS), and Dogecoin (DOGE).
Poloniex uses Tradingview for its charting services. The service is limited and doesn't compare well against Tradingviews original service. All assets listed on Poloni DEX are not available to chart in both Tradingview and Coinigy. Poloni DEX also uses a limited version of Tradingview.
Kraken has the reputation of being the cheaper exchange compared to other exchanges but not against Poloniex. Kraken does serve the more security conscious trader and investor, additional, funds are cryptographically verifiable with a proof-of-reserves audit. These conditions are worth the expense.
Kraken fees need to be reviewed and understood to trade effectively on their platform. The tiers offered can make all the difference to the monthly bottom line for a professional trader or investor. The costs of trading can be astronomical to the users' trading balance when they are not taken into account.
Poloniex is aggressively seeking business from traders and investors. Due to this, their fees are extremely competitive. Compromises are made for this reduced cost. Poloniex is the smaller exchange with less volume Coinmarketcap, and FTX Volume Monitor both place Kraken above Poloniex.
Safety and trust
Kraken is one of the safest exchanges in the Cryptocurrency markets, not suffering a single hack. This is by design and not by accident. Kraken engineers have taken the time to design a system that works and are usable for the most part.
Another amazing feature is the Global Settings Lock. This feature blocks IP addresses that are not associated with the account.
This can be spoofed/made to look like another address is being used than the actual originating address, meaning someone in the United States can look like they are computing over the internet from Austria. This would have to be a targeted attack and, for the most part, probably the user’s fault. This would have nothing to do with Kraken.
Kraken allows for the use of 2FA which makes hacking your account harder but not impossible.
Is Poloniex Safe?
Poloniex is not as safe as Kraken. Considering how they handled an internal bug on the 12th of February 2020 and not compensating users for the effects of the bugs with the use of an insurance fund, we have concerns about funds left on this exchange. Their location also makes it harder to seek legal resolution to problems.
Poloniex uses Email 2FA for new IP addresses. Poloniex will send an email to your registered email account. This will contain a series of numbers that can be input after your login details. This is safe unless someone hacks your email account finds an old Poloniex email or you mention your crypto interests online. You can also use 2FA to lock down your account further on Poloniex.
Kraken vs Poloniex: Conclusion
This boils down to how the investor or trader interacts with either exchange and the available markets. Both Kraken and Poloniex have their respective markets. Kraken is America focused and Poloniex has shifted towards China.
Kraken is the more reliable exchange, simply because we can see what their management has done in the past and can predict what they are likely to do in the future. We don't see a problem using Poloniex, as trading of investment platform the fees are cheaper but would strongly advise against keeping funds on the exchange long term.
To be fair we don’t trust Kraken either, not your keys not your crypto. Both exchanges should be used when needed, at all other times purchased coins should be in hardware wallets. Only when coins are going to be sold immediately should they be on an exchange.
We feel confident using both exchanges. If the investor or trader follows proper crypto hygiene; simply use a hardware wallet, back up the hardware wallet, and never leave funds on an exchange. Secure the exchange with 2FA and create a 2FA backup.