Kraken Suspends Monero Deposits After 51% Attack Hits Network

Why Kraken Suspends Monero Deposits After Qubic’s 51% Blockchain Attac

Kraken suspends Monero deposits after a serious 51% attack shook the privacy coin’s network. The exchange said the pause was a security step after one mining pool, Qubic, gained control of more than half of the total mining power of this cryptocurrency.

Source: Wu Blockchain

Why Kraken suspends Monero Deposits?

Post Kraken suspends Monero, they explained that deposits are unsafe while the network is under attack. With over 50% of the hashpower, the Qubic mining pool was able to reorganize six blocks and leave nearly 60 blocks orphaned. 

This type of hacks means the blockchain can be rewritten, transactions blocked, or even double-spending attempted.

For now, Kraken suspends Monero deposits but confirms that trading and withdrawals remain available. The exchange said deposits will restart only when the network is stable again.

How the Monero Attack Was Detected? 

The issue was spotted by blockchain security firm SlowMist, which noticed an unusual reorganization of blocks. Charles Guillemet, CTO of Ledger, also confirmed that the 51% attack was real and warned that Qubic had been building up mining power for months.

Reports suggest that controlling this privacy coin at this level costs around $75 million per day. 

Many in the community were shocked to see a smaller project like Qubic, with a market cap of only $377 million, overpower the privacy coin, which is worth about $4.87 billion.

Impact on the Network

It is famous as a privacy coin, with features that hide the sender, receiver, and transaction amounts. But these same features also make it harder to track mining pools and prevent centralization. 

The crypto community is also frustrated with the silence of blockchain’s developers. Many users feel that the lack of clear communication during the Monero network attack has left too much confusion. Some called the response “pathetic” and demanded better transparency.

As per the CoinMarketCap XRM price dropped about 14% after the news but later recovered and is now trading at $264.13 with an increase of 11.51% in the last 24 hours. 

Source: CoinMarketCap

Even though the coin bounced back, the event raised new doubts about the long-term security of smaller proof-of-work blockchains.

What Happens Next ?

For the time being, Kraken suspends Monero deposits until it is sure that the network is secure. Analysts advise users to wait for additional block confirmations before transactions are finalized. 

The incident demonstrated the risks posed by mining power centralization, making networks vulnerable to attack.

This incident also indicates that even long-established and reputable projects like this are not completely immune to 51% attacks. It has highlighted privacy coins, which are already under scrutiny from regulators concerned with illicit usage.

Conclusion

The attack has cast difficult questions on the future of privacy coins. Kraken suspends deposits of the privacy coin to shield users, but the true challenge is how the community regains trust and avoids future attacks on its blockchain security.