Kraken telling customers on the login page: “Not your keys, not your coins”
Kraken is a United States-based cryptocurrency exchange and bank, founded in 2011. The exchange provides cryptocurrency-to-fiat-money trading and provides price information to Bloomberg Terminal.
One of their tips that can be read on their website is as fellow: “Keep the majority of your crypto offline in a hardware wallet. Only keep the funds you need for trading and other activities on Kraken.”
The fact that they want people to get crypto off their platform is an indicator that they are customer-centric. They’d benefit if people kept it there because they could use customer’s crypto to stake it themselves and make a wagonload of money. It’s good for the crypto space that we have exchanges that are doing their best for customers. We win, they win. I doubt Kraken is perfect, because who is? They are trying, and that’s what matters to me.
When logging into your favorite exchange, it might seem like you actually own the coins on your account. After all, you do need to log in to gain access to them, right?
Wrong. It looks like you’re in total control of your assets… until you try to withdraw more cryptocurrencies than the platform permits – or lower than a certain threshold. As a matter of fact, the exchange might take a cut of any cryptocurrency transaction you make. They can quite simply do this, since you don’t own the private keys to the crypto assets on your account – they have them.
There’s a plethora of reasons why you’d want to own your keys, rather than leaving it in the custody of a third party, requiring you to trust your funds to them. The most obvious is accidentally entrusting it to malicious actors. Should you have trusted a malicious third party with your money, you’ll likely never see it back. Thankfully this is quite unlikely with established companies.