It might not be a surprise to you, but today I had a realization.
I realized that on Kraken, Tier 2 has a MONTHLY withdrawal limit of $50,000.
AND THEN I realized that the ANNUAL withdrawal limit is also $50,000.
Tier 3 monthly and annual withdrawal limit is $100,000.
Meaning, if you make $1,000,000 in profit from crypto trading on Kraken, it will take you TEN YEARS to withdraw it.
If you transferred $20k in Bitcoin INTO Kraken, then that counts against your withdrawal limit when you try to take it out.
A. 24 month rolling total. If you withdraw $50k/$100k today, you won't be able to withdraw a penny more until 366 days from now.
B. When you hit your limit, that's it. Want to send some coin to another exchange to buy more coin or do some arbitrage?
Too bad.
Want to buy some either and send it to an ICO so you can get a Lambo?
Too bad.
Want to pay your taxes with your actual profits?
Too bad.
C. You better get Tier 3 verification.
Warning: One page on Kraken's site shows that it's $100k annual withdrawal limit. The main limits pages shows it's $200k monthly (and says nothing about annual.....which surprises a lot of people).
Now hey, it's a pretty good problem to have, right? YOu put in $20k and try to pull out $200k. But can't.
Kind of a win/lose scenario right that.
So. Get tier 3 verified, and treat the funds you are then forced to sit on for 1-5 years as a savings account. LIterally locked away from you so you can spend it/wast it. But then, you can't invest into income producing real estate, etc, either.
The only effective way to regulate cryptocurrency is to regulate access to fiat. This is a good example. Do the verifications required for know your client (KYC) and anti-money laundering (AML) and you can get access to fiat. Just like you have to do for any normal bank account.
Here are the words from the Kraken webiste
https://support.kraken.com/hc/en-us/articles/201352206-What-are-the-Verification-Tiers-
We had all best get used to it. This is how the big boys protect their industries.
Bummer if somebody just made a million. Might take years to get out, unless they'll dispense permission to go over the $100k (another page said $200k) per year.