Kraken Halts Monero Deposits After 51% Attack Sparks Security Concerns
Kraken suspends Monero deposits after 51% attack raises concerns about security and decentralization of the privacy-focused cryptocurrency.
Crypto exchange Kraken has suspended deposits of Monero (XMR) following reports that a single mining pool seized majority control of the privacy-focused network’s hashing power. The move has reignited debate about the security and decentralization of one of the industry’s longest-running cryptocurrencies.
Kraken confirmed the decision on Friday, stating: “As a security precaution, we have paused Monero deposits after detecting that a single mining pool has gained more than 50% of the network’s total hashing power. This concentration of mining power poses a potential risk to network integrity.”
A so-called “51% attack” occurs when a single entity or group controls the majority of a blockchain’s computational power, granting them the ability to reorder transactions, reverse completed payments, or block new ones. While such events have previously impacted smaller proof-of-work blockchains like Ethereum Classic and Bitcoin Gold, Monero has long been regarded as more resilient due to its broad base of independent miners. That perception is now being tested.
Layer-1 blockchain and mining pool Qubic claimed responsibility for achieving majority control over Monero’s network earlier this week, reportedly reorganizing six blocks. The Monero community has pushed back on whether the incident constitutes a full-fledged attack, but the fact that such a concentration occurred at all has shaken confidence in the network.
Qubic framed the episode as “a pivotal moment in the crypto industry,” contrasting the takeover of Monero—a network valued at $6 billion—with the strength of its own $300 million AI-driven project. The pool briefly lost its edge after a denial-of-service (DDoS) attack on August 4 slashed its hashrate from 2.6 GH/s to 0.8 GH/s, but it soon recovered and regained majority control. Sergey Ivancheglo, a co-founder of IOTA and a polarizing figure in blockchain circles, claimed responsibility for Qubic’s involvement.
The news has fueled speculation about Qubic’s motives. Some critics argue the maneuver was a publicity stunt designed to promote the project, while others say the incident illustrates a deeper vulnerability in proof-of-work systems: the risk of centralization when mining power is concentrated in a few hands.
Monero, the world’s 29th largest cryptocurrency by market capitalization, has built its reputation on privacy, employing ring signatures, stealth addresses, and confidential transactions to protect user anonymity. Its community has long promoted decentralized mining on consumer hardware to avoid precisely the kind of centralization now on display. The recent events have raised fresh doubts about whether such safeguards can withstand market pressures that increasingly favor larger, more powerful mining pools.
Kraken has not indicated when Monero deposits will resume, but said it is monitoring the situation closely. Other exchanges may follow suit, as sustained centralization of hashrate exposes user funds to double-spending risks. In previous 51% attacks on smaller networks, exchanges have responded by lengthening confirmation requirements or suspending deposits altogether.
The Monero case underscores a central dilemma for proof-of-work blockchains: maintaining decentralization in the face of growing industrial-scale mining. For Monero, the latest developments represent not only a technical challenge but a test of its core ethos of privacy and resilience.
