Kraken Pauses Monero Deposits Amid Qubic's 51% Hashrate Claims

Kraken has suspended Monero (XMR) deposits following claims by the mining pool Qubic—founded by IOTA co-founder Sergey Ivancheglo—that it has achieved over 51% control of the Monero network’s hashrate. The exchange cited the need to protect users and ensure network security as the primary reason for the pause, though trading and withdrawal functions for Monero remain unaffected [1]. This move highlights the ongoing risks associated with 51% attacks, where a single entity gains enough computational power to manipulate the blockchain, potentially enabling double-spending or altering transaction records [1].

Qubic admitted to reorganizing six blocks on the Monero blockchain, claiming it did so to demonstrate potential vulnerabilities and to encourage the community to strengthen its defenses against future threats [1]. However, the action has drawn criticism, with some accusing the pool of undermining a network known for its strong privacy features. The mining pool has invited independent verification of its claims, but no confirmed double-spend incidents have yet been reported [1].

The news triggered a decline in Monero’s price, with the asset trading around $257 in the days following the announcement, down roughly 6% for the week. By Friday, it had fallen further to $241.69, according to exchange data [1]. Analysts note that the broader cryptocurrency market has been volatile, and the Monero news has amplified investor uncertainty, particularly for privacy coins already under regulatory scrutiny [1].

While some Monero developers have questioned the accuracy of Qubic’s claimed hashrate, emphasizing discrepancies between its reported mining power and actual block production, others remain cautious. The event raises concerns about the decentralization of the network. Experts caution that even perceived vulnerabilities can harm a blockchain’s reputation, potentially deterring institutional adoption and long-term user confidence [1].

Kraken’s response reflects a cautious approach by one of the largest exchanges in the industry. Although no confirmed double-spend attacks have occurred, the incident underscores the risks posed by concentrated mining power and the importance of maintaining a decentralized network [1]. For Monero supporters, the situation serves as both a warning and a call to action to reinforce the network’s security infrastructure.

The Monero community is now closely monitoring Qubic and the project’s development team to see how they address the current situation. Whether the network implements stronger measures or continues to face questions about its long-term resilience remains to be seen. The outcome may shape Monero’s future trajectory and influence broader perceptions of privacy-focused cryptocurrencies.

Source: [1] What Kraken’s Monero Suspension Reveals About 51% Attack Risks (https://coinmarketcap.com/community/articles/68a31dcdbb247e1a57fb856e/)