Kraken Halts Monero Deposits Amid Qubic’s 51% Hashrate Surge

Kraken has temporarily suspended Monero (XMR) deposits following a reported surge in hashrate control by a single mining pool, Qubic [1]. The exchange cited security concerns after Qubic claimed to have reorganized six blocks and orphaned more than 60 others, signaling potential manipulation of transaction history [2]. While trading and withdrawals remain available, Kraken emphasized that deposits will only resume once the network’s stability is confirmed [3]. The move reflects the growing risks associated with centralized mining power in smaller blockchains, especially those reliant on proof-of-work consensus [4].

Qubic, which initially ranked as the seventh-largest Monero miner, redirected its mining efforts to the network at the end of June and reported reaching a hashrate of 2.6 gigahashes per second (GH/s) by August 14—more than half of Monero’s estimated total hashrate of 6.0 GH/s [5]. This development enabled the pool to temporarily alter the blockchain’s transaction history, raising concerns about the possibility of a 51% attack [6]. Despite a Distributed Denial of Service (DDoS) attack on August 4, which briefly reduced Qubic’s hashrate to 0.8 GH/s, the pool quickly regained strength and maintained control over the majority of Monero’s hashrate [7].

Monero developers have cast doubt on whether the event constitutes a true 51% attack, noting that block reorganization alone does not necessarily confirm network compromise [8]. Some argue that the pool may have simply had high hashrate at a critical moment, rather than executing a coordinated attack [9]. Nevertheless, the incident has sparked broader concerns about the centralization of mining power and the vulnerability of privacy-focused blockchains. Monero, launched in 2014, has long emphasized user anonymity through features like hidden addresses and encrypted transaction values, but its relatively low hashrate has made it more susceptible to such security risks [10].

The Monero community has responded with mixed reactions. Some users have questioned the accuracy of Qubic’s claims, while others have called for miners to diversify support across smaller pools to prevent further centralization [11]. Despite these concerns, Monero’s price has shown limited impact, rising by 9% in the past 24 hours to $265, with a market cap of approximately $4.90 billion and daily trading volume reaching $90 billion [12]. Analysts suggest the incident serves as a reminder of the importance of maintaining decentralized mining ecosystems to prevent similar events in the future [13].

Source:

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

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

[3] BeInCrypto https://beincrypto.com/kraken-freezes-monero-deposits-while-traders-drive-price-higher/

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

[5] Live https://www.livebitcoinnews.com/kraken-pauses-monero-deposits-amid-51-hashrate-concerns/

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

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

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