Kraken Borrow US

To use Kraken Borrow US, you must:

• Complete identity verification on your Kraken account and open an approved Kraken Derivatives account. The first time you use Kraken Borrow US, you will be guided through activating a Kraken Derivatives US account and reviewing and accepting the applicable disclosures and agreements.
• Not be an Eligible Contract Participant. An Eligible Contract Participant is defined by the Commodity Exchange Act and is generally someone with over $10 million invested on a discretionary basis.
• Hold eligible assets on Kraken that count toward your borrowing limit.
• Be a US resident in 48 states, excluding New York and Maine.

Kraken Borrow works differently depending on where you live. This article describes the US product only. If you've used Kraken Borrow in another country, that account and its terms are separate, and don't apply to your US account.

Your buying power is the total you can spend on a purchase: your USD plus what you can borrow. You can borrow up to 3 times the value of your eligible assets, including the crypto you're buying. Borrowed USD can only be used to buy eligible crypto.

For example, $100 in USD gives you up to $400 to spend: your $100 is a regular Kraken trade. Your $300 borrowed amount is a separate spot margin trade.

The crypto you buy is all yours, but the portion purchased with borrowed USD is held as collateral at Kraken Derivatives US and remains unavailable for withdrawal or transfer until the loan is repaid. In the example above, that's the $300 of BTC: it shows as unavailable in your portfolio, and it can't be withdrawn or sent. You can still sell it, and money from the sale repays what you owe first, with anything left over staying as USD.

Your other assets stay available. You can withdraw or sell them, as long as enough value remains to safely cover what you owe.

The two transactions complete independently, and your USD is always spent first. If the borrowed part can't be completed in full, the USD part still stands. You'll see what was bought, and you can retry the rest. Fees and interest apply only to the completed part.

Borrowing has two costs: a one-time borrow fee, and interest until you repay. Both are shown before you confirm a purchase. The USD part of your purchase is charged the standard Kraken trading fee, which is free for Kraken+ subscribers.

Interest is shown as a daily cost, collected in small amounts every four hours. It's taken from your USD first; if there isn't enough, small amounts of your crypto are sold to cover it, which may count as sales for tax purposes.

The interest rate can change over time. The Borrow Center shows your daily interest cost. There is no scheduled repayment date while the account continues to satisfy the applicable terms and requirements.

Repay what you owe at any time from the Borrow Center, using USD or any asset you hold. Assets are converted to USD first (a conversion fee applies). There's no repayment deadline or minimum payment. Interest is charged until you repay, and stops on whatever you've repaid.

Buying with borrowed funds makes gains bigger when prices rise, and losses bigger when they fall. The Borrow Center shows your borrow health: the value of your USD and eligible assets compared with what you owe.

• Healthy. Your USD and eligible assets comfortably cover what you owe.
• Caution. Values have dropped, and you're getting close to a liquidation threshold. You may receive a margin call asking you to add eligible assets or repay part of what you owe.
• At risk. Your borrow health has reached the liquidation threshold, and some or all of your crypto may be sold automatically to repay what you owe. Liquidation may occur quickly and without additional notice or an opportunity to add assets or repay.

A margin call appears as a message in the app and as a banner on the Borrow Center, but you should not rely exclusively on receiving this warning before liquidation.

If your borrowing stays at risk, the sale goes ahead. It uses your USD first, then any other cash, then sells your crypto, starting with eligible assets. Liquidations may not cover everything owed, in which case you may still be required to add USD.

If you have questions about a margin call, liquidation, or anything else in this article, contact support.

The borrowed part of your purchase is a spot margin transaction. It's provided by NinjaTrader Clearing, LLC d/b/a Kraken Derivatives US, a CFTC-registered Futures Commission Merchant and NFA Member (NFA ID: 0309379), with financing provided by an affiliated lender. The USD part is a regular Kraken trade and separate from your Kraken Derivatives US account.

Before your first borrow, you'll review and accept the Kraken Derivatives US terms: plain-language documents that explain the risks of spot margin trading, some standard eligibility statements you're confirming are true, and the agreement covering the service.