The well-known American crypto exchange Kraken has launched its own non-custodial wallet.
This is an app for iOS (iPhone) that allows users to store and safeguard their cryptocurrencies themselves.
Summary
The new Web3 crypto wallet from Kraken
Unfortunately, there are not many crypto exchanges that have launched a non-custodial wallet yet.
The most famous perhaps is the one from Coinbase, the largest American crypto exchange, which launched it several years ago. More recently, Binance also launched one, but it doesn’t seem to be completely self-custodial. However, Binance owns the company that developed Trust Wallet, one of the most widely used non-custodial wallets in the world.
Instead, Kraken’s non-custodial crypto wallet is not only completely self-custody, since only the user owns the seed, but it is also open-source and free of KYC.
In the official page regarding the privacy of the new Kraken wallet, it is written that the only user information stored are the IP addresses and public addresses used.
They also write:
“When you use our services, we aim to collect the minimum amount of personal data possible from you. Your privacy is our priority”.
They specify that the collection of data on IPs and addresses is necessary for regulatory compliance.
They automatically collect the IP addresses of users who are connected from sanctioned countries, while all other IP addresses are not stored.
Furthermore, they record the public addresses of all users who use the wallet, but do not link them to any personal data, unless the IP address is found to come from a sanctioned country.
It is therefore not only a classic non-custodial crypto wallet, but also without KYC.
The other features of Kraken’s non-custodial crypto wallet
Kraken defines this new wallet as simple, secure, and powerful.
This is a multi-chain wallet that currently supports the blockchains of Bitcoin, Ethereum, Solana, and Dogecoin, as well as the layer-2 solutions of Ethereum Polygon, Arbitrum, Optimism, and Base.
Interestingly Base is the layer-2 launched by competitor Coinbase.
So it does not support neither Tron, nor especially Binance’s BSC. This last absence could play a little against it, because it is the third most used blockchain in the DeFi sector after Ethereum and Tron itself.
However, they specify that these are the blockchain “initially” supported, and this suggests that they may add more in the future.
Furthermore, being a non-custodial wallet and without KYC, it can be used by everyone, even by those who are not yet registered on the Kraken exchange, which is a CEX, a centralized exchange.
However, being a non-custodial wallet does not allow for direct buying and selling of cryptocurrencies through the CEX. In fact, for now, it does not even seem to allow for direct internal swaps, although it does allow for connection with various DEXs to make exchanges there.
By supporting the Solana network and Ethereum layer-2 like Arbitrum, it can also be used on DEXs with very low commission costs, thus solving the problem due to the lack of an internal swap service.
Security
The key points that Kraken emphasizes the most are security and above all customer service.
Usually non-custodial wallets do not have a customer service. Instead, Kraken Wallet’s customer service is active 24 hours a day, 7 days a week, 365 days a year. In fact, they allow wallet users to use the exchange’s customer service.
This could be a significant competitive advantage compared to other non-custodial wallets, especially for novice users.
Actually, novice users often prefer custodial wallets, such as those integrated within CEX, because they are much simpler to use and do not require taking on the exclusive responsibility of seed storage.
However, withdrawing your funds from CEX to store them on a non-custodial wallet protects you from the closure or failure of the CEX, as has already happened several times in the past, for example with the FTX case. The downside is that if the seed is not stored properly, it could fall into the hands of malicious actors who could empty the user’s wallet with that seed.
Although for non-custodial wallet providers there is no way to protect users’ seed, leaving the task of protecting it exclusively to the user, an always active customer service could still help even the less experienced to start using these technologies so innovative and different from all the previous ones.
To underline the importance of wallet security, Kraken has decided to make its code open-source. It is the first major crypto exchange to release its own open-source wallet.
