Kraken halts Monero deposits after Qubic 51% attack on XMR network

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Saturday, Aug 16, 2025 10:21 pm ET1min read
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Aime RobotAime Summary

- Kraken paused Monero (XMR) deposits after Qubic mining pool executed a 51% attack, reorganizing six blocks and orphaning 60.

- The attack exposed vulnerabilities in small proof-of-work networks like Monero, which relies on privacy features but faces risks from centralized mining power.

- Kraken emphasized deposit suspension was precautionary, while trading continues, and highlighted the need for stronger decentralization to prevent future exploits.

- Privacy advocates warn that persistent centralization could erode trust in privacy-focused cryptocurrencies and prompt exchange or protocol-level responses.

Kraken has temporarily suspended Monero (XMR) deposits following a confirmed 51% attack on the blockchain, attributed to the Qubic mining pool gaining control of more than 50% of the network’s hashrate. This development has raised concerns about the security and decentralization of Monero, a privacy-focused cryptocurrency that utilizes proof-of-work (PoW) consensus. The mining pool reportedly reorganized six Monero blocks and orphaned 60 others, indicating a high level of control over the network’s validation process [1].

The exchange has taken the precautionary step to halt deposits, while allowing trading and withdrawals to continue, in an effort to preserve the integrity of the network. Kraken’s CEO, David Ripley, stated that the decision was made after detecting the concentration of mining power in a single pool, which poses a potential risk to the network. The company emphasized that it is monitoring the situation closely and will resume deposits once it deems the network secure [2].

This event highlights the vulnerability of smaller PoW networks to attacks when mining power becomes overly centralized. Monero, which launched in 2014 and ranks as the 29th largest cryptocurrency by market capitalization, relies on strong anonymity features such as confidential addresses and transaction amounts. However, its relatively small hashrate compared to larger blockchains makes it more susceptible to attacks when a single mining pool gains a majority share. This incident follows historical patterns where similar attacks have disrupted smaller PoW networks, such as

Ethereum Classic
[3].

The attack comes after Qubic previously faced a denial-of-service (DDoS) attack that temporarily reduced its hashrate from 2.6 gigahashes per second (GH/s) to 0.8 GH/s. Despite this, the mining pool managed to regain its hashrate and eventually achieved control over the network. The event has intensified discussions within the Monero community about the need for stronger decentralization strategies and improved security measures to prevent further exploitation [2].

Privacy advocates have emphasized the importance of addressing the risks posed by concentrated mining power to maintain the integrity and trustworthiness of the network. The broader cryptocurrency industry is now watching closely to see how Monero will respond to this challenge and whether similar vulnerabilities could affect other smaller blockchains.

The impact on Monero’s price has not yet been significant, but continued centralization could affect long-term market confidence in privacy-focused PoW coins. If the issue persists, it may lead to reduced exchange support or community-driven changes to the blockchain’s consensus mechanism.

Source: [1] Kraken pauses Monero deposits following 51% attack (https://cointelegraph.com/news/kraken-pause-monero-deposits-after-51-attack)

[2] Kraken Suspends Monero Deposits After 51% Attack ... (https://cryptodnes.bg/en/kraken-suspends-monero-deposits-after-51-attack-linked-to-qubic-pool/)

[3] Crypto Short News – Latest Real-Time Updates (https://coinpedia.org/crypto-live-news/)