Kraken halts Monero deposits after Qubic 51% attack exposes network vulnerability

Kraken has temporarily suspended Monero (XMR) deposits after identifying that the Qubic mining pool, led by IOTA co-founder Sergey Ivancheglo, had gained control of more than 50% of the Monero network’s hashrate. The exchange cited security concerns related to the potential for block reorganization, transaction censorship, and double-spending attacks [1]. The suspension is a precautionary measure to protect user assets while the situation is assessed. Trading and withdrawal functions for Monero remain unaffected and fully operational [2].

The attack, which involved reorganizing the blockchain six blocks deep, caused the orphaning of approximately 60 blocks, according to Kraken’s statement [2]. This level of control over the network raises significant concerns about the centralization of mining power and the integrity of Monero’s security model [3]. Qubic’s dominance was confirmed by multiple sources, including cybersecurity firm SlowMist, which acknowledged the successful execution of the 51% attack [4]. At the time of the incident, Qubic was reported to have controlled up to 2.6 GH/s of Monero’s total hashrate [5].

Monero, a privacy-focused cryptocurrency launched in 2014, has long faced the risk of 51% attacks due to its relatively small hashrate compared to major blockchains. The recent event underscores the vulnerabilities of smaller Proof-of-Work networks when mining power becomes overly concentrated [3]. In response to the attack, the Monero team reportedly began refining its 51% attack protection mechanisms [1]. Meanwhile, Ivancheglo stated the purpose of the attack was to expose potential vulnerabilities and prepare the community for future threats [1].

Following the incident, Monero’s price dropped to around $257, reflecting a 6% decline over the week [6]. The price movement highlights the market’s sensitivity to security threats, especially in the context of privacy-focused assets. While the attack did not result in widespread financial loss, it has sparked a broader conversation about the risks associated with centralized mining and the need for more robust network defenses [7].

Kraken’s decision to halt Monero deposits is in line with past actions taken by other platforms in response to network vulnerabilities. The exchange emphasized its ongoing monitoring of the situation and stated that it would resume deposits once the network is deemed secure [2]. This incident reinforces the importance of continuous security assessments and adaptive measures in the cryptocurrency ecosystem [8].

Source:

[1] title: Kraken halts Monero deposits after single pool takes over 50% hashrate control

url: https://cryptobriefing.com/monero-51-attack-kraken-halts-deposits/

[2] title: Kraken: We have paused Monero deposits after detecting ...

url: https://www.reddit.com/r/Monero/comments/1mr0lh2/kraken_we_have_paused_monero_deposits_after/

[3] title: Kraken halts Monero deposits after Qubic 51% attack on ...

url: https://www.ainvest.com/news/kraken-halts-monero-deposits-qubic-51-attack-xmr-network-2508/

[4] title: Crypto Short News – Latest Real-Time Updates

url: https://coinpedia.org/crypto-live-news/

[5] title: Kraken Suspends Monero Deposits After 51% Attack ...

url: https://cryptodnes.bg/en/kraken-suspends-monero-deposits-after-51-attack-linked-to-qubic-pool/

[6] title: Kraken halts Monero deposits after single pool takes over 50% hashrate control

[7] title: Kraken Suspends Monero Deposits After 51% Attack ...

[8] title: Kraken halts Monero deposits after Qubic 51% attack on ...