Kraken Halts Monero Deposits After 51% Attack on Network

Kraken, one of the largest centralized cryptocurrency exchanges, has suspended Monero (XMR) deposits following a 51% attack on the network. The incident occurred when the Qubic mining pool briefly gained control of more than half of Monero’s total hashing power, reaching a peak of 2.6 GH/s. With this majority control, Qubic was able to reorganize six blocks, effectively rewriting parts of the blockchain and orphaning around 60 blocks [1]. In response, Kraken halted XMR deposits as a security precaution, while emphasizing that trading and withdrawals remain unaffected [2].

This attack represents the first confirmed breach of Monero’s consensus protocol, despite previous security challenges, including a flooding attack in 2024. Monero, launched in 2014, is known for its strong privacy features, which obscure sender, receiver, and transaction amounts. These features, while attractive to privacy-conscious users, also make the network a potential target when mining power becomes concentrated [3]. The attack has reignited concerns about the vulnerability of smaller Proof-of-Work blockchains with limited hashpower and mining diversity [4].

Kraken stated that it made the decision after detecting a significant concentration of mining power in a single entity, which poses a threat to the network’s integrity. The exchange is actively monitoring the situation and has indicated that deposits will resume once the network is deemed secure. In the meantime, users are advised to stay informed as the exchange updates its policies based on developments [5].

The broader cryptocurrency community has expressed concern over the lack of communication from Monero developers following the incident. Critics argue that the silence has left room for the Qubic mining pool to shape the narrative, raising questions about transparency and governance within the project. Unstoppable Wallet described the lack of official statements as “pathetic,” highlighting the need for more proactive communication from project teams during security crises [6].

The market initially reacted to the news with a 14% drop in Monero’s price, though the token has since recovered. As of August 16, Monero trades at $256.41, with a market capitalization of $4.73 billion. The incident adds to the growing scrutiny of privacy coins, which are already under pressure from regulatory bodies concerned about their use in illicit activities [7].

The attack also highlights broader systemic risks within smaller Proof-of-Work networks, where centralization of mining power can lead to network instability. Analysts have long warned that such networks are more susceptible to 51% attacks due to their limited hashpower and the concentration of mining activities among a few pools [8].

Kraken’s action underscores the importance of continuous monitoring and adaptive strategies in the face of evolving threats to blockchain security. The broader crypto industry is now watching closely to see how Monero will respond and whether additional measures will be taken to enhance network resilience and prevent similar incidents in the future [1].

Source:

[1] Cointelegraph - https://cointelegraph.com/news/kraken-pause-monero-deposits-after-51-attack

[2] MSN - https://www.msn.com/en-us/money/markets/kraken-halts-monero-deposits-as-qubic-seizes-51-hashrate/ar-AA1KEALn?ocid=finance-verthp-feeds

[3] AInvest - https://www.ainvest.com/news/kraken-halts-monero-deposits-qubic-51-attack-xmr-network-2508/

[4] CryptoSlate - https://cryptoslate.com/kraken-suspends-monero-deposits-after-51-attack/

[5] Coindoo - https://coindoo.com/kraken-suspends-monero-deposits-after-network-attack/

[6] CryptoDnes.bg - https://cryptodnes.bg/en/kraken-suspends-monero-deposits-after-51-attack-linked-to-qubic-pool/

[7] StartupNews.fyi - https://startupnews.fyi/2025/08/17/kraken-temporarily-halts-monero-deposits-after-mondays-51-attack/

[8] CoinStats - https://coinstats.app/news/1a857d0f4407c6a043b0c7b7141b5801d6e660586bf90aa3b5968f50c3019330_Kraken-Suspends-Monero-Deposits-Over-Security-Concerns/