The attack occurred over the weekend, although Kraken identified the issue early on
Kraken has halted Monero (XMR) deposits after the privacy-focused blockchain came under a 51% attack, raising new concerns about network security. The decision was announced on Friday, with the exchange stating that one mining pool had gained majority control of Monero’s hashing power, creating a potential risk to transaction integrity.
A 51% attack happens when a single miner or pool controls more than half of a blockchain’s computing power, which allows it to reorder transactions and even double-spend coins. In this case, Qubic, a layer-1 AI-driven blockchain and mining pool, claimed earlier in the week that it had crossed the threshold and reorganized six blocks on Monero’s chain. The group described the event as the outcome of a month-long battle for control of the hashrate.
The Monero community has been divided, with some denying that a true takeover occurred, but Qubic says it successfully reached dominance before suffering a denial-of-service attack on August 4 that temporarily cut its hashrate from 2.6 GH/s to 0.8 GH/s. Despite that setback, Qubic later restored its computing strength and regained a majority share of the network.
Kraken emphasized that pausing deposits is a security precaution, not a permanent measure. Still, the move underscores how fragile blockchain ecosystems can become when hashrate is concentrated in too few hands. For Monero, a coin valued at roughly $6 billion by market capitalization, the episode carries added weight given its focus on privacy and its global user base.
Qubic, which itself is far smaller in valuation than Monero, framed the takeover as a turning point, saying it demonstrated how a $300 million protocol could seize control of a much larger network. For traders and exchanges, the attack highlights the risks of depending on decentralization that may not be as evenly distributed as intended.
