Head to head
Coinbase vs Kraken: which one is safer?
These are the two most heavily licensed venues we grade, and on four of the five checks our findings are the same. The whole two-step grade gap comes down to one column — proof of reserves, which carries 30% of the grade — and to whether anybody outside the company has looked at the numbers.
Five weighted checks, side by side. Checks where the two differ: 1.
How to read these grades: each is derived from published, checkable disclosures — proof-of-reserves attestations, public regulatory registers, disclosed insurance funds and the documented incident record — using the weighted rubric below. Where an exchange does not disclose something, we mark it unverified rather than assume it. These are not audits and not investment advice; they reflect what was published as of our last review.
Both sides
The two records
Same rubric, same five checks, both letters derived the same way.
Coinbase
3.7/5 · Safety grade
Coinbase is a publicly traded, SEC-reporting U.S. company licensed in 45 states and holding a New York BitLicense, and the SEC's 2023 case against it was dismissed with prejudice in February 2025; it runs no crypto-specific proof-of-reserves programme and its last disclosed crime-insurance figure dates from 2019.
Kraken
4.3/5 · Safety grade
Kraken holds a Wyoming SPDI charter, CFTC and SEC registrations and two EU MiCA authorisations, and has published Merkle-tree proof of reserves verified by Armanino LLP since February 2022; it discloses no insurance-fund figure.
The comparison
Check by check
Five weighted checks, side by side. Checks where the two differ: 1.
Proof of reserves
Weight 30%Runs no exchange-wide proof-of-reserves programme; reserve assurance rests on its Deloitte-audited filings as an SEC-reporting public company, plus per-asset attestations for wrapped tokens such as cbBTC.
Merkle-tree proof of reserves verified by third-party accountant Armanino LLP since February 2022, most recently finalised 30 June 2025 across BTC, ETH, SOL, USDC, USDT, XRP and ADA.
Custody
Weight 25%Coinbase Custody is an NYDFS-regulated qualified custodian, but the cold/hot storage split is not disclosed and we could not confirm it from a primary source.
Cold/hot storage split is not disclosed; we could not confirm it from a primary source.
Regulation
Weight 20%New York BitLicense, FinCEN MSB registration, UK FCA registration FRN 900635 and licences in 45 U.S. states; paid a $100m NYDFS consent order in January 2023, and the SEC's 2023 unregistered-exchange suit was dismissed with prejudice on 27 February 2025.
Wyoming Special Purpose Depository Institution charter, CFTC DCM/DCO/FCM and SEC broker-dealer/RIA registrations, and two EU MiCA CASP authorisations; settled with the CFTC for $1.25m in September 2021 and with the SEC for $30m in February 2023 over its U.S. staking-as-a-service programme, relaunching on-chain U.S. staking in January 2025.
Insurance
Weight 15%A $255m crime policy covering hot-wallet assets was disclosed in 2019; Coinbase still advertises commercial crime cover for custodied assets but has not confirmed a current figure.
No insurance-fund figure is publicly disclosed. Our research found no SAFU-equivalent named fund, which is a disclosure gap rather than confirmation that none exists.
Incident history
Weight 10%No confirmed platform-level breach of customer funds found in our research.
No confirmed major security incident found in our research; Kraken has operated since 2011 with no reported breach costing customers funds.
Head to head
What the difference actually is
Kraken publishes Merkle-tree proof of reserves verified by third-party accountant Armanino LLP, running since February 2022 and most recently finalised on 30 June 2025 across BTC, ETH, SOL, USDC, USDT, XRP and ADA. Coinbase runs no exchange-wide proof-of-reserves programme; its reserve assurance rests on Deloitte-audited filings as an SEC-reporting public company, plus per-asset attestations for wrapped tokens such as cbBTC. That is stronger than nothing and weaker than a proof you can check your own balance against — and because proof of reserves carries 30% of the grade, one differing column produces the whole gap between A- and B. On the other four they are closer than the letters suggest. Both licence books are checkable: Kraken holds a Wyoming Special Purpose Depository Institution charter, CFTC DCM, DCO and FCM registrations, SEC broker-dealer and RIA registrations, and two EU MiCA CASP authorisations; Coinbase holds a New York BitLicense, a FinCEN MSB registration, UK FCA registration FRN 900635 and licences in 45 U.S. states. Neither discloses its cold/hot storage split. Neither has a confirmed platform-level breach of customer funds in our research. Both are marked partial on insurance, though not identically: Coinbase has a figure on the record that has gone stale — $255m of crime cover disclosed in 2019 — while Kraken publishes no insurance-fund figure at all. And both carry settlements: Kraken $1.25m with the CFTC in September 2021 and $30m with the SEC in February 2023 over its U.S. staking-as-a-service programme, with on-chain U.S. staking relaunched in January 2025; Coinbase a $100m NYDFS consent order in January 2023, with the SEC's 2023 suit dismissed with prejudice on 27 February 2025.
The shared blind spot
What neither of them shows you
Both records come back short on these checks — 40% of the grade, where the letter difference tells you nothing and you are taking both venues at their word.
Custody
25%- Coinbase
- Partial or unaudited
- Kraken
- Partial or unaudited
Insurance
15%- Coinbase
- Partial or unaudited
- Kraken
- Partial or unaudited
The decision
Which one, and when
Choose Coinbase if
On these five checks, nothing here favours Coinbase: it matches Kraken on four and is behind on the fifth. The reasons somebody might still pick it — whether it operates where you live, which assets and products you need, what it costs to trade — are real, and none of them is what this page measures. Choose it knowing there is no reserve proof you can verify yourself.
Choose Kraken if
you want to check your own balance against a reserve proof an outside firm has signed — the single check that separates these two, and the heaviest one in the rubric — and you can accept that no insurance-fund figure is published at all and that the cold/hot storage split is not disclosed.
Next
Where to go from here
The rest of the graded ledger, and the rubric both letters came from.