Kraken Suspends Monero Deposits After 51% Attack by Qubic Pool

Generated by AI AgentCoin World
Saturday, Aug 16, 2025 5:05 pm ET1min read
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Aime RobotAime Summary

- Kraken suspended Monero (XMR) deposits after Qubic mining pool executed a 51% attack, triggering a six-block blockchain reorganization and orphaning 60 blocks.

- The attack exposed Monero's vulnerability to centralized mining threats, raising concerns about network security and decentralization despite its privacy-focused design.

- Kraken emphasized trading/withdrawals remain active, with deposits paused until network security is confirmed, reflecting exchanges' growing caution over mining concentration risks.

- Monero's price dropped 14% post-attack, highlighting market sensitivity to security breaches, while analysts debate whether the incident was a stress test or malicious act.

- Qubic's lack of full 51% control claims and Monero developers' silence have fueled criticism, underscoring transparency challenges in blockchain crisis communication.

Kraken has suspended Monero (XMR) deposits following a confirmed 51% attack on the Monero network, which was executed by the Qubic mining pool on August 12. The mining pool briefly gained control of over 50% of Monero’s hashrate, reaching a peak of 2.6 GH/s, and executed a six-block deep reorganization of the blockchain [1]. This enabled Qubic to alter transaction history, orphaning approximately 60 blocks and raising significant concerns about the network’s security and decentralization [1].

In response, Kraken took the precautionary step of halting XMR deposits to mitigate potential risks to its users. The exchange emphasized that trading and withdrawals for Monero remain fully operational and that deposits will resume only when the network is deemed secure [1]. The decision reflects the growing awareness among exchanges of the risks posed by concentrated mining power, especially in smaller or privacy-focused blockchains.

This event marks the first major breach of Monero’s consensus protocol and highlights the vulnerability of mid-tier proof-of-work blockchains to centralized mining threats [1]. Monero, which launched in 2014 and is designed to provide untraceable transactions by concealing sender, receiver, and transaction amounts, has previously experienced security issues, including a network flooding attack in March 2024. However, the recent 51% attack represents the most significant protocol-level compromise to date [1].

The attack triggered a 14% decline in Monero’s price, underscoring the market’s sensitivity to security threats and reigniting concerns about centralization risks in privacy-focused digital assets [1]. Analysts have noted that while some believe the attack could have been a stress test rather than a malicious act, the absence of an official response from the Monero development team has drawn criticism and amplified uncertainty [1].

Qubic, the mining pool responsible for the attack, has not claimed full 51% control of the network but has gained narrative traction by being more vocal than the Monero developers [1]. This has led to broader discussions about the importance of transparency and communication within the blockchain community during crises.

As of 9:20 pm UTC on August 16, 2025, Monero is ranked 29th in market capitalization, with a price of $256.41 and a 24-hour increase of 7.92%. The cryptocurrency has a market cap of $4.73 billion and a 24-hour trading volume of $67.26 million [1]. The broader crypto market was valued at $3.98 trillion, with

Bitcoin
maintaining a dominance of 58.92% [1].

The incident underscores the growing challenges faced by privacy coins in balancing network security with public trust. As exchanges like Kraken implement defensive measures, the broader crypto industry may need to reassess its approach to supporting smaller, privacy-centric networks [1].

Source:

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