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Coinsquare Vs. Krakenː The Main Difference Is Their Operating Areas

Coinsquare vs Kraken at a Glance

Unless you live in Canada, you’ll likely want to pick Kraken over Coinsquare. Even though Coinsquare lets anyone create an account, only Canadian residents can become verified Coinsquare users and complete the verification needed to fund accounts with fiat currency and make trades. Without verification, all you can do on Coinsquare is deposit cryptocurrencies. You can’t fund your account with fiat currency or place trade orders. Kraken, on the other hand, is available in Canada, the US, Europe and Japan.

With all that being said, Coinsquare may provide some competition for Kraken and other US-based crypto exchanges once Coinsquare enters the US market and starts letting its US customers access all the core features of the Coinsquare site. That should happen sometime this year after Coinsquare goes public in September.

The one key advantage Coinsquare has over Kraken is that Coinsquare supports debit and credit card buys. Kraken and most other US exchanges only accept bank transfers and crypto deposits. If Coinsquare continues accepting debit and credit cards after it enters the US, that convenience may encourage some casual crypto investors to join.

In other areas, Coinsquare does have a lot of catching up to do. Aside from the lack of credit/debit card support noted above, Kraken is still a better exchange in nearly every other category. Kraken supports more altcoins than most US exchanges, plus it is also one of the few crypto exchanges anywhere that offers margin trading.

Coinsquare Kraken
Strengths
  • Supports Canadian bank deposits.
  • Low commission fees.
  • Automated ID verification.
  • Supports US, European, Canadian and international bank deposits.
  • Low commission fees with discounts for high volume traders.
  • Automated ID verification.
  • Margin trading.
  • Good US / worldwide availability.
  • Good altcoin support.
Weaknesses
  • Only available in Canada.
  • No commission discounts for high volume traders.
  • Poor altcoin support.
  • High deposit/withdrawal fees.
  • Doesn’t accept debit / credit cards.

Visit Coinsquare -- $20 Free Bonus

Background

Coinsquare

Coinsquare’s founder and Chief Technical officer Virgile Rostand comes from an unusual background. He wasn’t an IT professional and he didn’t come from the financial services world. Before founding Coinsquare, Rostand was an academic. He gave mathematics lectures at Universite Laval.

Rostand’s mathematics background helped him realize the potential of cryptocurrency. He founded Coinsquare in 2015 and ran nearly all aspects of the business himself until 2017, when he hired Cole Diamond to the position of Chief Executive Officer.

Diamond serves as the public face of the company when Coinsquare releases information to the press. Before joining Coinsquare, Diamond founded an online marketplace called Gift Network and was the VP of Sales at Jumbleberry.

Coinsquare’s primary investor is Canaccord Genuity Corporation. Canaccord led a funding round in 2018 that yielded $30 million total. An unnamed investor helped Coinsquare raise $10 million in 2017.

Related: Coinsquare Review: An Advanced Digital Currency Exchange for Canadians

Kraken

Jesse Powell is Kraken’s outspoken founder and CEO. Unlike Rostand, Powell has been intimately involved with crypto exchanges since the first Bitcoin exchanges emerged in 2009. When first-generation Bitcoin exchange Mt. Gox fell victim to a devastating hack in 2011, Powell assisted with the recovery– and then he started his own exchange that same year.

With a focus on expansion and regulatory compliance, Kraken has become one of the premier crypto exchanges in the US. In 2016, Kraken absorbed two competing exchanges: US-based Coinsetter and a Canadian exchange called Cavirtex.

In addition to running Kraken, Powell has also helped with the initial development of Ripple– a blockchain-based remittance network / settlement system. Powell routinely provides comments about cryptocurrency related news to the press.

Though Powell has worked to get his exchange licensed in many US states, he is also one of the most outspoken critics of New York’s controversial BitLicense. To Powell, BitLicense is an example of regulatory overreach. In his view, the BitLicense application process is too expensive and resource-intensive.

Kraken’s primary investors include Hummingbird, Trammel Ventures, Blockchain Capital and Money Partners Group. In addition, the exchange has received venture capital funds from Bitcoin Foundation Chairman Brock Pierce and BitGo co-founder Ben Davenport.

Related: Kraken Review: High Liquidity Markets for Advanced Traders

Supported Currencies and Listing Policies

Kraken supports a wider array of altcoins compared to Coinsquare.

Kraken lists 17 different cryptocurrencies including Augur REP tokens, Bitcoin, Bitcoin Cash, Dash, Dogecoin, EOS, Ethereum, Ethereum Classic, Gnosis, ICONOMI, Litecoin, Melon, Monero, Ripple, Stellar/Lumen, Tether and Zcash. Coinsquare only lists Bitcoin, Bitcoin Cash, Dash, Dogecoin, Ethereum, Litecoin and Squarecoin.

Kraken also supports more fiat currencies compared to Coinsquare. Kraken users can deposit British pounds, euros, US dollars, Canadian dollars and Japanese yen. Coinsquare only accepts British pounds, US dollars, euros and Canadian dollars.

Listing policies

Coinsquare and Kraken both have a clean record of offering only high quality crypto coins. Neither exchange has ever listed a fraudulent cryptocoin.

Coinsquare’s philosophy regarding altcoins seems to be that they only consider adding the most popular and well-known cryptocurrencies. When BNN Bloomberg asked Coinsquare CEO Cole Diamond which cryptocurrencies Coinsquare will be adding next, Diamond revealed that Ripple is “first in line.”

“We’re going to be adding Ripple, we’re going to be adding Monero, we’re going to be adding other digital currencies that again have their own blockchains and never did these Initial Coin Offerings with the exception of Ethereum.”

He went on to say that Coinsquare does not accept coins that are actually shares of companies or any in-app and in-game currencies.

Kraken CEO Jesse Powell explained his views regarding altcoins to CoinDesk:

“Some of these are just pump and dumps, and it costs a lot of dev time to put these coins in [to the exchange]. And I think it says something to people, that we start trading it. So we want to be careful what we put our name on.”

Security and Hacks

Coinsquare and Kraken have never been hacked. Kraken’s hack-free record is perhaps slightly more impressive, though, because Kraken is several years older than Coinsquare.

Part of the reason why Kraken has managed to avoid a major security incident is the fact that it only holds a small percentage of its assets in “hot wallets”– in other words, wallets that are connected to the internet. The majority of its assets are sealed away in offline “cold wallets.”

Unlike Kraken, Coinsquare has not revealed much about the techniques it uses to keep its users safe. On the Coinsquare website, Coinsquare advertises that it’s “built on the same technology as the New York Stock Exchange.”

Like most mainstream crypto exchanges, Coinsquare and Kraken offer 2FA (Two-Factor Authentication) integration. Both platforms support Google Authenticator and several other 2FA apps.

Availability and Identity Verification

Verification policies

Coinsquare and Kraken both have fast, automated verification systems. Automated verification is a convenient feature because it lets you begin making deposits, withdrawals and trades immediately after you sign up.

Currently, Coinsquare requires all its users to possess some type of Canadian ID card. You can use a driver’s licence, passport, national identity card, permanent resident card or a health card (Quebec Only) to obtain verification. Without verification, you can’t do much on the site except look at the interface.

On Kraken, there are five different verification tiers. With tier 0, all you can do is view the site. However, once you provide your full name, date of birth and place of residence, you can proceed to tier 1, which lets you deposit and withdraw cryptocoins. Tier 2 lets you link your bank account to your Kraken wallet. To unlock tier 2, all you have to do is provide your social security number if you live in the US. You only need a picture ID if you want to increase your deposit/withdrawal limits.

pasted image 0 21
Sourceː CoinIQ

Trading, Fees and Apps

Trading interface

Coinsquare has two different interfaces: quick trade and advanced trade. The quick trade interface is more newbie-friendly, but it restricts you to placing market orders. Another thing to keep in mind is that Coinsquare charges slightly higher fees when you use quick trade to place an order.

The basic flavor of Coinsquare is depicted below.

basic 1
Sourceː CoinIQ

The advanced version of Coinsquare is very similar to the basic interface, only it gives you the option to place a limit order.

newinterface 1
Sourceː CoinIQ

Kraken’s interface designers opted to hide the charts. To place a trade, find the currency pair you want and then click the Trade tab and select New Order.

krakenint
Sourceː CoinIQ

If you want to view what’s going on in the markets, you can click Charts from the menu bar on the top of the page to view detailed graphs of cryptocurrency markets.

charts
Sourceː CoinIQ

Fees

Coinsquare and Kraken both have low commission fees. However, only Kraken offers fee discounts to frequent traders.

The cheapest way to trade via Coinsquare is via the advanced interface. If you place an advanced trade, you’ll pay a flat 0.1% maker / 0.2% taker commission fee. For quick trades, you’ll pay a 0.4% fee for altcoin trades and a 0.2% fee if your trade involves Bitcoin.

Kraken’s commissions are different for every currency pair, but most pairs start with a base fee of 0.16% maker / 0.20% maker. The more you trade on Kraken, the less you’ll pay in commission fees.

XBTUSDFEES
Sourceː CoinIQ

Kraken offers a better overall deal for deposits and withdrawals. Kraken users in Japan and Europe can move money into and out of their Kraken accounts for free, but US residents have to pay a $5 wire transfer fee. All of Coinsquare’s deposit and withdrawal options include a percentile fee.

Coinsquare’s high withdrawal/deposit fees are partially offset by the fact that the exchange offers withdrawal/deposit discounts to users that have large amounts of cash in their accounts. If you have $25,000 or more in you Coinsquare account, you only have to pay 0.25% for withdrawals and deposits. You can make wire transfers for free if you have $100,000 or more.

Mobile apps

Coinsquare has much better app support compared to Kraken.

The reason why Coinsquare’s app ratings are low is that initial versions of the apps had limited functionality. At first, you couldn’t fund your Coinsquare account via the app. In recent months, however, Coinsquare has addressed this concern.

Kraken doesn’t have an Android app at all, and its iOS app has received bad reviews for being buggy and slow.

Customer Support and Community

When it comes to customer support, Coinsquare and Kraken offer identical options. Both exchanges handle user requests via a ticket system.

Support Options Coinsquare Kraken
Ticket-based system Yes Yes
Telephone support No No
Online chat No No
Knowledge base Yes Yes
FAQ Yes Yes
In-house forum No No

Cryptocurrency Regulation

Though government regulators everywhere are still in the process of coming to grips with blockchain technology, some crypto exchanges have attempted to act as though they are already regulated.

Coinsquare and Kraken have both made efforts to comply with financial service best practices. They both have fairly robust KYC (Know Your Customer) and AML (Anti Money Laundering) policies.

In an interview with Betakit, Coinsquare CEO Cole Diamond explained that Coinsquare’s slow expansion strategy allowed the exchange to pay more attention to compliance issues.

“We thought we were a lot safer to take the approach by being focused within this country. The rules of engagement are different in Canada than they are in the US than they are in Europe, so why not just focus here and play along, and bring it to other markets later?”

Even though Kraken CEO Jesse Powell has opted out of New York’s controversial BitLicense, he recently told Bloomberg that he plans to take a very proactive approach to getting registered with the U.S. Securities and Exchange Commission.

“We would probably get registered as a broker dealer and then an ATS,’’ Powell said. “I don’t think it necessarily helps the business. I think we’re doing everything right anyway.’’

Final Thoughts

Overall, Kraken has more to offer cryptocurrency investors compared to Coinsquare because it operates in the US and Europe, offers many free withdrawal/deposit options and lists a wide range of promising altcoins in addition to Bitcoin.

Coinsquare is hampered by the fact that it’s core features are only available in Canada– but that may change this year if Coinsquare follows through on its goal of expanding into Europe and the US. For the time being, however, Coinsquare is only worth considering if you live in Canada and want to finance your cryptocurrency purchase with your credit or debit card. Otherwise, Kraken offers a better set of features.

Alex Munkachy

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