Kraken pauses Monero deposits after Qubic mining pool gains majority hashrate

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Ivan Andriyenko

17.08.2025

Kraken pauses Monero deposits after Qubic mining pool gains majority hashrate — Kraken Suspends Monero Deposits

A popular cryptocurrency exchange, Kraken, has temporarily suspended Monero (XMR) deposits after confirming that the Qubic mining pool had gained control of more than 50% of the network’s total hashing power. The exchange stated that the move is a precautionary measure to protect user funds and preserve blockchain integrity, while trading and withdrawals remain fully accessible.

According to the announcement, the suspension will continue until the network’s security is assured. The exchange noted that such concentration of mining power creates risks of transaction reordering and double spending — vulnerabilities long associated with 51% attacks on proof-of-work blockchains.

Monero’s vulnerability and Qubic’s actions

The incident has become a serious test for Monero, the 29th-largest cryptocurrency and one of the most well-known privacy-focused coins. Monero is recognized for concealing transaction data, but its model depends heavily on widely distributed mining power. A relatively modest hashrate compared to larger blockchains makes the network more vulnerable to concentrated control.

Qubic, a layer-1 project combining artificial intelligence with mining, admitted to reorganizing six blocks, leaving around 60 blocks orphaned. The group stated that its “useful proof-of-work” model incentivizes Monero miners to support its ecosystem, a strategy critics described as exploiting economic incentives rather than conducting a traditional hostile attack.

“After a month of intense technical confrontation, Qubic reached 51% of Monero’s hashrate, successfully reorganizing the blockchain,” the project declared.

Market reaction and ongoing risks

Industry experts warn that the case highlights the growing challenge of maintaining decentralization in mid-sized blockchains. Analysts draw parallels to past 51% attacks on Ethereum Classic, noting that without broader mining participation, privacy-focused networks remain exposed.

Market response has been mixed. While XMR’s price briefly rose 8% in the last 24 hours, it has dropped more than 25% over the past three months, reflecting concerns about long-term security. Analysts suggest investors may increasingly scrutinize privacy coins, especially as regulators focus on vulnerabilities that could be exploited for illicit purposes.

Kraken emphasized its commitment to user safety and transparency, assuring clients that deposits will resume once confidence in the network is restored. For the Monero community, the incident has reignited debate over whether proof-of-work systems can balance privacy with sustainable security in an increasingly competitive mining environment.

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