Poloniex vs. Kraken: Exchange Review: Are They Safe?

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Poloniex and Kraken are two of the more prominent cryptocurrency exchanges in the market today. They both carry a wide variety of different digital assets and allow users the opportunity to perform some types of more advanced trades such as margin trading, shorter lending, and other options.

This article will examine the positive and negative aspects of each platform to help readers determine which one is more suited to their particular needs. Depending on the type and quantity of trading that an individual is looking to perform, the choice could potentially be worth a significant amount of money in the long run.

Comparing Poloniex vs. Kraken

Both Poloniex and Kraken are exchanges that are best suited to moderately experienced or advanced traders. Neither one accepts small amounts of fiat currency and mostly require that users already own some form of cryptocurrency in order to buy in.

First time users may be somewhat intimidated or confused by the wide array of options that are available on these platforms. When compared to more beginner-friendly platforms such as Coinbase, the displays and the many options presented by these exchanges may be initially overwhelming.

Despite this, both exchanges have intuitive, uncluttered displays given the vast array of options that they both offer. Kraken helps to mediate this by offering a variety of different display types that can accommodate users of all experience levels.

Funding Methods of Poloniex vs. Kraken

Poloniex and Kraken offer somewhat different options in regards to the types of ways that users are able to buy in to their platforms. Poloniex is the more limited of the two, as they only allow consumers to pay with other types of cryptocurrency such as Bitcoin or Ethereum. They do not offer any options for direct transfers, credit cards, or debit cards.

Kraken does accept some forms of fiat currency, provided that users pass their screening process. The platform divides the clientele into several different tiers based on their history and security clearance, and each tier allows users different privileges.

Tier 1, the lowest possible tier, requires users name, birthdate, country of residence, and telephone number and allows users to buy and sell cryptos only. Tier 2 and 3 allow for options like direct deposit through bank transfer, but that means that users must also provide banking info to the platform.

Options offered by Poloniex and Kraken

Both sites allow for users to trade coins as either makers or takers. They both carry a wide variety of digital assets, which are listed in a later section in greater detail.

Poloniex is one of the few major exchanges that gives users the option to trade on margin or to lend coin to shorters. These are strategies that some highly knowledgeable traders use in order to increase their overall earning power, however they are not usually recommended for the less experienced.

As mentioned above, Kraken offers three different interface types for beginning, intermediate, and advanced users. The beginner interface allows for both market and fixed price orders, as well as several other minor features. In the upper levels, however, users are given access to features like leverage options, conditional closes, stop limits, and more.

Consumer Support

Kraken has a standard, though unimpressive record of offering support to their users. They use a support ticket system, which usually takes several days to resolve. They do not offer any telephone or instant messaging options.

Poloniex has had some more extensive issues with customer support in the past. The turnaround time on their support tickets is notoriously slow, with some taking as long as five months to resolve. There are also reports online from users that say that their support tickets were lost, ignored, or otherwise never resolved.

Trust

Both of these exchanges are relatively well regarded by the crypto community, which is demonstrated most clearly in the large amount of business that each market does every day.  That said, they have both experienced issues with their clients that have at times damaged their reputations.

There are some complaints that can be found online about Poloniex alleging that users’ withdrawal requests were never completed and that they did not receive their funds. In addition to these issues, the support tickets regarding these issues also were reportedly ignored.

Beyond this, Poloniex was also the victim of one of the largest hacking events in cryptocurrency history, which is discussed further in the below section. Kraken has also experienced some minor hacking events, which are also detailed in the next section, however the way that they have handled these issues has demonstrated to their users the overall trustworthiness of the organization.

Security

Poloniex and Kraken have each had some security related incidents in their past. Kraken’s event, however, was relatively minor and is not thought to be a major issue.

In January of 2018 Kraken announced with short notice that their site would be going dark for two hours in order to perform necessary maintenance. Instead of this brief interruption, however, the platform was actually out of commission for 40 hours, preventing all trading on the site, locking users from their funds, and spawning rumors that they may have been hacked.

The site was restored without any major issue and users that lost substantial amounts of currency due to the incident had their accounts credited. These measures to make things right with their upset clientele seems to have worked for the most part, as they have seen little impact to their overall trading levels.

Poloniex’s event was several years ago, however it is still regarded as one of the biggest cryptocurrency hacks in history. In 2014 a group of hackers exploited a faulty piece of Poloniex code and stole nearly a million dollars’ worth of Bitcoin from the exchange.

The company reimbursed all affected users and claims to have updated their security measures since then. Despite this, there are still reports of minor hacks that appear from time to time, further compromising the overall reputation of the platform.

Both Poloniex and Kraken keep the vast majority of their funds off-line in cold storage. This means that it is very difficult for hackers to access them and ensures that there can’t be any major events that change the value of their currencies.

Neither exchange is insured by the FDIC, as many of the larger exchanges tend to be. Several years ago, most exchanges were not FDIC insured, however it is a protection that many consumers are coming to expect from their exchanges.

Fees

Both platforms use a variable fee structure based on whether or not the customer is a maker or a taker and on the volume of trades that users have made over the last 30 days. Their maker fees are very similar, ranging from 0.00% to 0.15% for Poloniex and 0.16% for Kraken.

The fee structure for takers is somewhat different, however, as Poloniex charges between 0.05% and 0.25%. In order to get the best rates, however, users need to be doing exceptionally high volumes of trading. For Kraken the fees have both a lower minimum and a higher maximum, and again the higher volume traders get the more favorable rates.

Both Poloniex and Kraken have a standard maximum withdrawal limit of 25,000 USD per day. Poloniex, however, does allow customers to apply to have these limits extended. Those individuals with a trustworthy history of high volume trading may be granted more privileges.

Kraken also has a deposit limit, only allowing users to add up to 25,000 USD per day. Deposits are usually available for trading after several days and require a proof of source funds. Both sites offer a full breakdown of their fee structures, limits, and specifications; interested parties are encouraged to compare these charts in order to determine which site will offer them the most competitive rates.

Offered Crypto

Both platforms offer a diverse array of coins far beyond those found on more basic exchanges. The currencies that can be found in both exchanges’ listings include Bitcoin, Bitcoin Cash, Ethereum, Ethereum Classic, Dash, Litecoin, Monero, and Ripple.

Kraken offers more than ten other types of assets, however Poloniex carries far more than even that. While the exact currencies that they carry changes from time to time, they currently have over 70 different types of tradeable assets on their platform.

Summary

Overall, Kraken and Poloniex offer very similar services, however Kraken users have reported far fewer issues with the platform than Poloniex users. This makes Kraken the safer choice for many individuals, though this does depend on the exact types of trading that they are looking to do.

Poloniex may still the right choice for some types of advanced traders that have very specific interests or needs. Consumers are encouraged to closely examine the fees structure to see which rates are the most favorable for the specific types of trading.

The other major exception to this are those users that are looking to lend to shorters or to perform certain types of margin trade pairings. These are functions that Kraken does not offer, which leaves Poloniex as the only option for those individuals.

Peter Lehmann

Peter is a blockchain investor and cryptocurrency writer at Vkool.com. Since 2014 Peter has advised blockchain startups and ICOs on content marketing, strategy and business development.

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