On top of all the abovementioned cons against QuadrigaCX, there are many questions surrounding the exchange that have yet to be answered. In 2017, QuadrigaCX lost $14 million dollars worth of ether due to a software glitch, but nobody is sure what effect the glitch had on QuadrigaCX’s balance sheets because it abruptly stopped publishing its audits in late 2015. QuadrigaCX CEO Gerald Cotten is the only remaining publicly known executive left at the exchange. Several of its leaders resigned in following a failed attempt to get listed on the Canadian Securities Exchange that same year.
Keep reading to find out more about how QuadrigaCX and Kraken compare.
QuadrigaCX’s history begins in 2013. CEO and co-founder Gerald Cotten started QuadrigaCX because there weren’t many ways for Canadians to invest in crypto at the time.
After Mt. Gox was raided by hackers and shut down in 2013, QuadrigaCX benefited from a swell of new users that switched sites. Another surge happened in 2015 when another first-generation exchange– CAVIRTEX– met a similar fate. After the dust had settled, QuadrigaCX was one of the last remaining crypto exchanges for Canadian residents.
Though QuadrigaCX benefited from the new users, the exchange may not have been ready for such a rapid growth spurt. Slow customer service caused slowdowns and outages. In the midst of this situation, QuadrigaCX’s leaders opted for an attempt to go public.
The method that QuadrigaCX used to get listed on the Canadian Securities Exchange drew criticism. Rather than file the paperwork needed to launch an IPO (Initial Public Offering), QuadrigaCX opted to try an RTO (Reverse Takeover). The takeover never happened and several QuadrigaCX executives quit the company weeks after the change of direction became apparent.
The exchange attracted more criticism in 2017, when a software glitch resulted in a loss of around $14 million dollars worth of ether. Though QuadrigaCX’s users didn’t have to eat the cost of the mistake, the exchange’s reputation suffered as a result of the error.
Despite the stumbles of the past several years, QuadrigaCX is still one of Canada’s most important crypto exchanges. Currently, QuadrigaCX ranks 91 on CoinMarketCap’s list of the top 100 most popular crypto exchanges in the world.
Like QuadrigaCX, Kraken’s early history is intertwined with the fate of the failed Mt. Gox exchange. After being called upon to help clean up the mess, Kraken founder Jesse Powell became inspired to build a more reliable kind of crypto exchange.
Powell debuted Kraken in 2011– the same year of the first cyber attack on Mt. Gox. Since its founding, Kraken has never been successfully compromised.
Kraken’s security-first approach to running a cryptocurrency exchange has earned it support from numerous big-name investors. Hummingbird, Trammel Ventures, Blockchain Capital, Money Partners Group, Bitcoin Foundation Chairman Brock Pierce and BitGo co-founder Ben Davenport have all contributed venture capital funds to Kraken.
Kraken has used its extensive resources to buy several smaller exchanges. In 2016, Kraken bought CAVIRTEX, which enabled it to expand into Canada. In the same year, Kraken also acquired the US-based crypto exchange Coinsetter.
Over the course of Kraken’s history, its leader frequently butted heads with US regulators. After Kraken left New York and Washington, Powell made several critical comments about new crypto laws in those states. Costs associated with meeting other regulations forced the exchange to lay off half of its team in 2014.
Kraken’s attention to playing by the rules and following stringent security practices has helped it become a popular exchange in North America and around the world. It’s now the 10th most popular crypto exchange in the world, according to CoinMarketCap.
Supported Currencies and Listing Policies
Kraken supports more fiat and crypto currencies than QuadrigaCX.
QuadrigaCX only supports five cryptocurrencies: bitcoin, bitcoin cash, bitcoin gold, ether and litecoin. Kraken, on the other hand, supports 17 different digital coins: auger, bitcoin, bitcoin cash, dash, dogecoin, eos, ethereum, ethereum classic, gnosis, iconomi, litecoin, melon, monero, ripple, stellar/lumen, tether and zcash.
As far as fiat currency is concerned, QuadrigaCX only has limited options compared to Kraken because it only supports US and Canadian dollars. (In 2014, QuadrigaCX briefly allowed its users to deposit and withdraw gold bullion, but it removed support for bullion shortly after debuting the feature.) Kraken users can deposit British pounds, euros, US dollars, Canadian dollars and Japanese yen.
Neither exchange has published much information about how they decide which cryptocurrencies to list.
“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
Though QuadrigaCX has never been hacked, it lost a huge amount of its funds when it added support for ether. As noted above, a software glitch caused QuadrigaCX to lose the equivalent of $14 million dollars worth of ether.
Kraken has a much better track record when it comes to safeguarding its funds. Like most modern custodial exchanges, Kraken uses offline “cold wallets” to ensure that hackers can’t tamper with its coffers.
Both Kraken and QuadrigaCX users can enable 2FA (Two Factor Authentication) to prevent unauthorized account access.
Availability and verification
Kraken has much better availability compared to QuadrigaCX.
QuadrigaCX has opted to stay out of the US in order to avoid US cryptocurrency regulations, but it’s accessible in most other countries.
Kraken initially launched in Europe, but today it’s present in Great Britain, the Euro Zone most US states and Canada– but not Japan. Kraken left Japan because it wasn’t able to gain a substantial amount of customers there. Powell explained the move in a statement.
“Perhaps we focused too much on regulation and not enough on marketing.”
Due to state restrictions, some US residents have limited access to Kraken features. Residents of Texas, New Hampshire and Washington can’t place margin trades on Kraken, for example.
QuadrigaCX and Kraken both have automated verification systems. In addition, both exchanges allow unverified traders to exchange cryptocurrencies. They do, however, require verification for fiat currency features.
QuadrigaCX’s automated system uses data derived from the credit reporting agency Experian to conduct its checks. Alternatively, users can take their ID documents to any Canada Post retail outlet and prove their identities in person.
Kraken has five different tiers of verification. To trade cryptocurrency, users must provide their full name, date of birth and place of residence. To deposit and withdraw fiat currencies, all that’s needed is a social security number (US residents only). A picture ID extends deposit and withdrawal limits.
Trading, Fees and Apps
This is what QuadrigaCX’s core interface looks like. Users can place trades using either the Dashboard or the Trade tabs. The simplified layout of the trading interface omits real-time charts. Some basic charts are available via the Live Trades tab, but QuadrigaCX’s charts area is not very sophisticated.
QuadrigaCX users can add funds to their account via the screen depicted below. The Select button opens up a wizard, which users can use to set up the different payment options.
Kraken’s interface is generally faster and more sophisticated compared to QuadrigaCX’s. Trades can be placed via the Trade tab.
As is the case with QuadrigaCX’s interface, Kraken has placed real-time charts in its own separate menu. Clicking Charts from the main menu allows you to see what’s going on in cryptocurrency markets.
Kraken’s lower fees make it cheaper to use compared to QuadrigaCX.
QuadrigaCX charges 0.5% for trades involving both crypto and fiat currencies. Crypto only trades are slightly cheaper, though. The Canadian exchange charges a flat 0.2% fee for crypto-to-crypto trades.
Instead of flat fees, Kraken offers a sliding fee scale that gives frequent traders fee discounts. Each Kraken market has a different fee scheme, but most fees start out at 0.16% maker / 0.20% maker.
Here’s Kraken’s XBT/USD fee chart:
Kraken’s fees for margin trading are also quite reasonable. Traders only have to pay 0.1% to borrow money to trade XBT/EUR, XBT/USD and USDT/USD. Then, every four hours, Kraken charges an additional 0.1%.
For other markets where margin trading is available, Kraken’s margin fee is 0.2% to open a position. The rollover fee is also 0.2%. The maximum length of time that Kraken traders can hold their margin position is 28 days. The maximum amount margin traders can borrow starts at $1000 USD and goes all the way up to $500000 (Tier 4 verified accounts only). Kraken will automatically liquidate a margin position after 28 days.
QuadrigaCX does not support margin trading functionality.
Kraken has only one app: a buggy, poorly-rated iOS app that hasn’t been updated in years. QuadrigaCX doesn’t have any apps at all.
Customer Support and Community
QuadrigaCX and Kraken have similar customer support options. Both exchanges rely on self-service ticket systems. Neither exchange offers chat or phone support.
QuadrigaCX’s strategy regarding regulation seems to have changed since its inception. Before QuadrigaCX debuted, it was already registered with the Financial Transactions and Reports Analysis Centre of Canada. During its early years, QuadrigaCX would make its audits available to the public in the interest of transparency. However, QuadrigaCX stopped this practice in 2015.
Kraken has had to meet more regulatory requirements because it operates in the US. Each state has different requirements. Kraken founder / CEO Jesse Powell has publicly criticized the way that some states regulate crypto exchanges. On the other hand, Powell has shown interest in acquiring federal licenses in the United States. Powel plans to eventually get Kraken registered as a broker-dealer and ATS (Alternative Trading System).
It’s hard to see why anyone would want to use QuadrigaCX instead of Kraken. QuadrigaCX’s feature list doesn’t present any compelling reason to use it instead of Kraken. Kraken’s fees are less expensive, plus its menu of supported coins is much deeper. Also, Kraken has better advanced features compared to QuadrigaCX. Kraken is one of only a small handful of crypto exchanges that lets you borrow money to place margin trades. QuadrigaCX doesn’t support margin trading at all. Yet another reason to choose Kraken instead of QuadrigaCX is that its interface is more intuitive and easier to use.
Perhaps the most important distinction between these two exchanges is the fact that Kraken has a much better reputation compared to QuadrigaCX. Kraken’s leadership is far more forthright about addressing issues as they arise. Few of QuadrigaCX’s executives are known, and its CEO Gerald Cotten had virtually no experience before he founded his exchange. Kraken CEO / founder Jesse Powell was a thought leader in the cryptocurrency space even before he launched his exchange and helped the poorly managed Mt. Gox exchange stop the bleeding in the wake of its notorious security incident.