TLDR
- Kraken paused Monero deposits due to a mining pool gaining control of over 50% of the network’s hashrate.
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Qubic mining pool claims to have caused a six-block reorganization in Monero’s blockchain.
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Monero price dropped 6% after news of the potential 51% attack spread.
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Kraken continues to monitor the situation and will resume deposits once conditions are deemed secure.
Kraken, one of the largest cryptocurrency exchanges, temporarily halted Monero (XMR) deposits after discovering that a single mining pool had seized over 50% of the network’s hashrate. This situation raised alarms about the potential risks to Monero’s decentralization and security. Kraken has confirmed that trading and withdrawals for Monero remain operational, but the pause on deposits will continue until the situation is assessed and deemed secure.
The disruption occurred after Qubic, a mining pool led by IOTA co-founder Sergey Ivancheglo, claimed to have successfully captured control over 51% of Monero’s total hashrate. Such control theoretically allows the pool to execute actions like block reorganization, transaction censorship, or double-spending attacks. This event has caused concern within the Monero community and beyond, with many closely monitoring the situation.
Qubic Mining Pool’s Controversial Claim of 51% Control
The Qubic mining pool’s claim that it now controls over 50% of Monero’s hashrate has sparked significant debate. Qubic’s leader, Sergey Ivancheglo, stated that the move was part of an effort to expose potential vulnerabilities within the Monero network and prepare the community for future threats.
According to Ivancheglo, the pool’s control allowed them to reorganize six blocks in Monero’s blockchain, a powerful ability that raises questions about the network’s security.
However, some Monero developers have disputed the seriousness of the claim. They argue that the pool’s reported hashrate and actual block production do not match, and there has been no confirmed double-spending attack. Despite this, the reported block reorganizations continue to cause concern, especially in the context of a privacy coin with a market cap of $6 billion. Even the suggestion of such vulnerabilities has raised questions about Monero’s security.
Market Impact and Monero Price Reaction
The news of the 51% attack and the ensuing halt in deposits caused a slight drop in Monero’s price. As of the latest reports, XMR was trading near $257, marking a 6% decline over the past week. The price decrease aligns with broader market trends, but it also reflects investor concerns over the attack and its potential effects on the coin’s long-term stability.
Despite the drop, Monero remains a widely traded privacy coin, with many seeing it as a crucial player in decentralized finance (DeFi).
The temporary pause in deposits is a precautionary measure, and Kraken has assured users that it is monitoring the situation closely. The platform stated it will reopen deposits once the situation has been reviewed, and it is confident that Monero trading and withdrawals will continue without issues.
Kraken’s Response and Future Monitoring
Kraken’s decision to suspend Monero deposits underscores the platform’s cautious approach to ensuring network integrity. The exchange’s team is actively investigating the issue and is in communication with relevant parties to assess the extent of the problem. As the situation evolves, Kraken has committed to updating its users regularly.
In the meantime, Kraken has emphasized that trading and withdrawal services for Monero will continue unaffected. This step is essential in maintaining trust with users while addressing potential threats. The exchange also mentioned it is carefully tracking developments and will resume Monero deposits once it deems the network safe.
