Kraken Halts Monero Deposits Amid 51% Network Attack by Qubic Pool

Kraken has temporarily halted Monero (XMR) deposits after the Qubic mining pool reportedly seized more than 50% of the Monero network’s hashing power, triggering concerns over a potential 51% attack. The move was announced as a security precaution to protect users and the integrity of the blockchain, with Kraken CEO Dave Ripley stating that the concentration of mining power poses a risk to network stability [1]. The exchange emphasized that trading and withdrawal functionality for Monero remains active, and deposits will resume once the network is deemed secure [2].

The Qubic mining pool executed a six-block deep reorganization of the Monero blockchain, resulting in the orphaning of approximately 60 blocks. This event marks the first major compromise of Monero’s consensus mechanism, sparking industry-wide discussions on the vulnerabilities of smaller Proof-of-Work (PoW) blockchains [3]. The attack has reignited concerns about the centralization of mining power and the ability of privacy coins to maintain their core values in the face of such threats.

Monero, a privacy-focused cryptocurrency launched in 2014, is designed to obscure sender, receiver, and transaction amounts, making it a preferred asset for users prioritizing financial anonymity. However, the same privacy features have also led to heightened regulatory scrutiny, particularly concerning the misuse of such coins in illicit markets [4]. The recent event has added further pressure on the project, especially as no official response from Monero developers has been made public, deepening uncertainty within the community [5].

The price of Monero dropped by as much as 14% following the attack, though it later recovered some ground. As of 9:20 pm UTC on August 16, 2025, Monero was trading at $256.41, with a 24-hour increase of 7.92%. Its market capitalization stood at $4.73 billion, while its 24-hour trading volume reached $67.26 million [6]. The broader crypto market remained relatively stable, with a total market capitalization of $3.98 trillion and Bitcoin maintaining a dominance rate of 58.92% [7].

The incident underscores the growing challenges faced by privacy-focused blockchains in maintaining both security and decentralization. Analysts have noted that smaller chains, particularly those using PoW, remain vulnerable to majority attacks and must address these risks to remain competitive in an increasingly regulated environment [8]. The response from exchanges like Kraken highlights the role of centralized entities in mitigating systemic risks and protecting user assets during periods of network instability.

The event may also lead to increased regulatory attention, particularly in jurisdictions where privacy coins are already under scrutiny. Exchanges handling such assets may face heightened compliance requirements, including the need to monitor and respond to network-level threats effectively [9]. As the industry continues to evolve, the balance between privacy and security will remain a key focus for developers, regulators, and market participants alike.

Source:

[1] title1 (https://www.ainvest.com/news/kraken-pauses-monero-deposits-qubic-claims-51-network-control-2508/)

[2] title2 (https://cryptoslate.com/kraken-suspends-monero-deposits-after-51-attack/)

[4] title4 (https://cryptonews.com/news/kraken-halts-monero-deposits-amid-51-attack-on-blockchain/)

[5] title5 (https://www.ainvest.com/news/kraken-suspends-monero-deposits-qubic-51-attack-exposes-network-vulnerability-2508/)

[8] title8 (https://www.msn.com/en-us/money/markets/kraken-halts-monero-deposits-as-qubic-seizes-51-hashrate/ar-AA1KEALn)

[9] title9 (https://www.coingabbar.com/en/crypto-currency-news/kraken-suspends-monero-deposits-after-51-attack?srsltid=AfmBOop8mbYgUbO-v0XX3XmmeOO6-o0qZMSidNItcE6krxuwAlBxzwec)