Kraken, a major centralized cryptocurrency exchange, has suspended Monero (XMR) deposits as a precaution following a reported 51% attack on the network by the Qubic mining pool. The pool achieved control of over half the network’s total hashing power, enabling reorganization of six blocks and orphaning approximately 60 prior blocks. Such dominance poses risks of double-spend attacks and transaction reordering.
In a public statement, Kraken indicated that while deposits are paused, trading and withdrawal operations for Monero remain active. The exchange will resume deposit acceptance once the network’s integrity is deemed secure. Deposit suspension is a standard mitigation strategy to prevent potentially reversed transactions and safeguard user funds during network instability.
Monero, the 29th largest cryptocurrency by market capitalization, emphasizes privacy features that obscure sender, receiver and transaction amounts. Its privacy protocols, while enhancing confidentiality, complicate monitoring of illicit activity and have drawn attention from both regulators and malicious actors. The recent attack highlights vulnerabilities in smaller proof-of-work blockchains with lower overall hashrate.
Qubic, an AI-focused layer-one blockchain and mining pool, claimed responsibility for the attack. Following a denial-of-service incident that reduced its hashrate in early August, Qubic recovered and ultimately surpassed the threshold required for a 51% takeover. The event underscores the fragility of networks with concentrated mining power and raises questions about decentralization thresholds.
Industry experts warn that 51% attacks erode confidence in blockchain immutability and may trigger regulatory scrutiny or delistings by exchanges. Analysts suggest that measures such as checkpointing, alternative consensus algorithms or increased node diversity could mitigate future risks. Monero developers and community stakeholders have yet to issue an official response, amplifying uncertainty.
The temporary halt in deposits follows price volatility, with Monero’s value slipping by as much as 14% before partially recovering. Market participants are monitoring on-chain data and wallet activity to gauge the extent of any double-spend or reorg-driven losses. Kraken has emphasized that depositors will be protected from losses arising from the attack, while advising users to track official network updates.
The incident may prompt privacy blockchain projects to implement additional safeguards. Proposed enhancements include dynamic difficulty adjustments, anti-reorg protocols and incentivization of solo mining to diversify hash distribution. Stakeholders stress the importance of robust governance frameworks and rapid community coordination to address emergency situations.
Kraken’s proactive response aims to maintain user trust and protect asset security. The exchange continues to monitor network health and will liaise with Monero developers to determine safe resumption parameters. Users holding Monero on Kraken have been notified of the situation via official status channels and are advised to await confirmation of restored deposit capability.
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