Kraken Halts Monero Deposits Amid Qubic's 51% Hashrate Control

Kraken has temporarily suspended Monero (XMR) deposits following reports that a mining pool, Qubic, briefly seized control of over 50% of the Monero blockchain’s hashrate. The exchange cited concerns over the potential for a 51% attack, which could allow a single entity to manipulate the blockchain by reorganizing blocks and enabling double-spending transactions. This action represents a rare move by a major exchange to restrict user access due to hashing power concentration [1].

According to several sources, Qubic claimed to have reorganized six blocks on the Monero blockchain as part of what it described as a "useful proof-of-work demonstration." The move raised immediate concerns among exchanges and investors, prompting Kraken to halt XMR deposits as a precautionary measure. The exchange emphasized that the suspension applies only to deposits, while trading and withdrawals remain unaffected [2].

Monero’s price briefly dropped by approximately 6% following the announcement, reflecting heightened uncertainty in the market. Although the price rebounded shortly after, the incident has sparked renewed debate over the security and decentralization of privacy-focused cryptocurrencies. Monero, which relies on proof-of-work (PoW) and aims to protect user anonymity, has long faced scrutiny over its vulnerability to mining centralization [3].

Industry experts have noted that the event highlights a key weakness in PoW blockchains when mining power becomes concentrated in a single entity. While Monero developers have downplayed the severity of the incident, stating that a reorganization of six blocks does not inherently indicate a malicious attack, the episode has drawn attention to the broader risks of network centralization [4].

The response from Kraken underscores the growing role of exchanges in managing security risks in the cryptocurrency space. By freezing deposits, the platform has demonstrated a proactive stance in protecting user assets in the absence of confirmed malicious activity. This move may signal a broader trend of exchanges implementing more rigorous measures in response to emerging threats [5].

As the situation evolves, the incident has also sparked discussions within the Monero community about potential solutions, including emergency changes to the proof-of-work mechanism. Efforts are underway to redistribute hashrate and raise awareness about the risks of centralized mining in privacy coin networks. The event serves as a reminder of the importance of maintaining decentralization in blockchain systems to preserve their integrity and trustworthiness [6].

Source:

[1] https://cryptobriefing.com/monero-51-attack-kraken-halts-deposits/

[2] https://coincentral.com/kraken-pauses-monero-deposits-as-qubic-mining-pool-claims-51-control-of-network/

[3] https://en.cryptonomist.ch/2025/08/18/security-alert-for-monero-kraken-stops-xmr-deposits-after-the-shock-of-the-51-attack/

[4] https://www.mitrade.com/au/insights/news/live-news/article-3-1046567-20250818

[5] https://www.cointrust.com/market-news/kraken-halts-monero-deposits-amid-mining-pool-takeover

[6] https://www.bitdegree.org/crypto/news/kraken-freezes-monero-deposits-after-qubic-claims-51-control