Crypto exchange Kraken has paused deposits of Monero (XMR) after warning of a potential 51% attack on the privacy-focused blockchain. The exchange said withdrawals and trading remain open, and deposits will resume once the network is deemed safe.
A 51% attack occurs when one entity controls more than half of a blockchain’s computing power, enabling it to reorder transactions and potentially double-spend. Kraken said on Friday that a single mining pool had surpassed that threshold, posing a risk to network security.
The claim follows an announcement by Qubic, a layer-1 blockchain project with an AI focus that also operates a mining pool. On Monday, Qubic said it controlled the majority of Monero’s hashrate and had reorganized six blocks. The statement was met with skepticism from parts of the Monero community, which denied an ongoing attack.
Monero, the 29th largest cryptocurrency by market capitalization at about $6 billion, is one of the industry’s most prominent privacy-preserving protocols. News of the alleged attack has triggered concern across its community and raised questions about the security of proof-of-work chains with concentrated mining pools.
Qubic’s rise to majority control followed weeks of turbulence. Earlier this month, the pool fell to seventh place among Monero miners after suffering what was described as a distributed denial-of-service (DDoS) attack on August 4.
The attack reduced its hashrate from 2.6 gigahashes per second to 0.8 GH/s, according to Sergey Ivancheglo, the blockchain developer who claimed responsibility for the takeover attempt.
The pool later recovered, regaining strength and eventually crossing the 50% mark. Qubic described the achievement as a turning point, noting the significance of a $300 million AI-focused blockchain pool overtaking a $6 billion privacy network.
For now, Kraken has said Monero deposits will stay suspended until the network is stable. The incident has intensified debate over the vulnerabilities of smaller proof-of-work ecosystems when a single mining pool accumulates excessive dominance.
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