Kraken Halts Monero Deposits After Qubic Launches 51% Attack

• Kraken stopped Monero (XMR) deposits after Qubic.
• Qubic, a $300 million AI blockchain, reorganized six Monero blocks after surviving a DDoS attack.
• The $6 billion privacy coin Monero faces security concerns from the attack.

Kraken, a major crypto exchange, has put a hold on Monero (XMR) deposits because of a serious security issue with the Monero network.

A single mining pool, Qubic, took control of over half the network’s computing power. Pulling off what’s called a 51% attack. This kind of attack lets the controlling group mess with transactions. Like spending the same coins twice or rearranging the blockchain’s records.

Kraken said on Friday that it’s pausing deposits to keep things safe, but people can still trade and withdraw XMR. They’ll let deposits start again once the network looks secure. 

This attack has shaken up the Monero community, especially since it’s a big privacy focused cryptocurrency, ranked 29th by market value at about $6 billion, according to CoinMarketCap.

What Happened with Qubic’s Takeover

Qubic, a smaller blockchain focused on AI with a $300 million market value, said it grabbed over 50% of Monero’s hashrate on Monday. And even reorganized six blocks on the blockchain. This means they rewrote part of the transaction history.

Which is a big deal for a privacy coin like Monero that’s built to keep transactions secret and secure. Qubic called this a “pivotal moment” in crypto, pointing out how their smaller project overpowered a much bigger one. But it wasn’t an easy win.

Back on August 4, Qubic faced a denial of service (DDoS) attack, where fake traffic overwhelmed their system, dropping their hashrate from 2.6 gigahashes per second to just 0.8.

Sergey Ivancheglo, who took credit for the 51% attack, said Qubic bounced back and took over the majority of Monero’s computing power.

Some Monero folks argued it wasn’t a real attack, but Qubic’s now the top mining pool for Monero, according to MiningPoolStats.

The Monero community is stirring with reactions. Some see this as a wake up call about the risks of one group controlling too much of a blockchain’s power. Especially for a coin that’s all about privacy. 

Monero’s designed to hide who’s sending and receiving money, unlike more open blockchains like Bitcoin. But with less computing power overall compared to bigger networks. This has ignited discussions on how Monero’s network can be made stronger against such attacks.