The funds all traders use for margin trading come from Kraken’s margin pools. While these funds are being used, they remain Kraken’s assets — no loan is enacted by our margin trading product.
Client funds are never used for Kraken’s margin trading pools or exposed to the market when trading on margin. Instead, a portion of your collateral relative to the leverage amount is reserved as a security for our margin funds, in case the position should fail.
The Kraken Margin Product has been designed to protect the integrity of the Kraken Margin Pools for the benefit of all Kraken clients. The goal behind building in self-executing triggers (liquidations) is to preserve the Kraken Margin Pools so that our assets remain available to all Kraken clients.
For more information, see Leverage and Margin in the Trading Guide.