Crypto exchange Kraken has temporarily suspended deposits of Monero (XMR) after detecting a 51% attack on the privacy-focused blockchain, raising fresh concerns over the security of one of the industry’s longest-standing digital assets.
The suspension followed evidence that a single mining pool had seized control of more than half of Monero’s hashing power, giving it the ability to reorder transactions and attempt double-spends.
“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,” Kraken said on Friday. “This concentration of mining power poses a potential risk to network integrity.”
For context, a “51% attack” occurs when a single entity or group controls the majority of a blockchain’s computational power, enabling them to rewrite parts of the ledger, reverse transactions, or block new ones. While rare, such attacks have been seen before on smaller proof-of-work blockchains like Ethereum Classic, Bitcoin Gold, and Verge, but Monero has historically been considered more resistant due to its strong community of independent miners. The fact that a network as mature as Monero has now faced this scenario has amplified industry concern.
Qubic Claims Responsibility
Layer-1 blockchain and mining pool Qubic said it had reached 51% dominance of Monero’s hashrate earlier this week, reorganizing six blocks in the process. The Monero community has disputed whether the event qualifies as a full-scale attack.
Qubic’s spokespeople described the development as “a pivotal moment in the crypto industry,” contrasting the takeover of a $6 billion privacy network with the capabilities of a $300 million AI-driven blockchain project.
The pool briefly lost its edge following a denial-of-service (DDoS) attack on August 4, which cut its hashrate from 2.6 GH/s to 0.8 GH/s, but it later recovered and regained majority control, according to developer Sergey Ivancheglo, who claimed responsibility.
Ivancheglo is best known as one of the original co-founders of IOTA and has been a controversial figure in the blockchain space. His involvement has drawn additional scrutiny, with critics suggesting the move may be as much a publicity stunt for Qubic as a genuine attack on Monero. Others argue that regardless of intent, the incident highlights how concentrated hashpower—even from an external project—can destabilize a network.
Monero, the world’s 29th largest cryptocurrency by market value, has long marketed itself as one of the most private and censorship-resistant blockchains. The ongoing hashrate takeover has rattled its community, with many warning that centralization of mining power undercuts its core ethos.
Monero’s design—using techniques like ring signatures, stealth addresses, and confidential transactions—has made it a favorite among privacy advocates, but also a target for regulators who associate it with illicit use cases. As mining becomes more competitive, observers fear that smaller miners may be priced out, leaving room for powerful pools to dominate. This is the very scenario Monero’s community has historically tried to avoid by encouraging mining on consumer-grade hardware.
While Kraken did not specify when deposits would be re-enabled, the exchange said it would continue monitoring the situation closely.
Other exchanges may follow Kraken’s lead, as prolonged centralization of hashrate can put user funds at risk. In past cases involving 51% attacks on other coins, exchanges have raised confirmation requirements or temporarily halted trading to mitigate risks of double-spending.
