Kraken pauses Monero deposits following 51% attack

Crypto exchange Kraken has temporarily paused Monero deposits due to the ongoing 51% attack against the privacy-focused blockchain, which has compromised the security of the network.

A 51% attack occurs when one mining pool controls more than 50% of a blockchain network’s total hashing power, giving it the ability to double-spend and reorder transactions on the ledger. The Kraken exchange wrote on Friday:

“As a security precaution, we have paused Monero deposits after detecting that a single mining pool has gained more than 50% of the network’s total hashing power. This concentration of mining power poses a potential risk to network integrity.”

Qubic, a layer-1 AI-focused blockchain and mining pool, claimed it controlled the majority of Monero’s hashrate on Monday and reorganized six blocks, prompting denials of the attack from the Monero community.

Monero is a major privacy-preserving protocol, and the 29th largest crypto by market capitalization, according to CoinMarketCap. The ongoing 51% attack on the network has sent shockwaves through the Monero community, triggering a wave of responses.

Single mining pool assumes control of the network

“After a month-long, high-stakes technical confrontation, Qubic reached 51% of Monero's hashrate dominance, successfully reorganizing the blockchain,” spokespeople for Qubic wrote on Tuesday. 

The mining pool was initially rebuffed in its attempt at a takeover, falling to the protocol’s seventh-largest miner and was hit with an alleged denial of service attack on August 4.

A denial of service (DDoS) attack floods a computer, network, or server with fake incoming traffic, clogging the system and preventing real traffic from coming through.

The DDoS attack on Qubic sharply reduced the mining pool’s hashrate from 2.6 gigahashes per second (GH/s) to just 0.8 GH/s, according to Sergey Ivancheglo, the individual who claimed responsibility for the 51% attack.

However, the Qubic pool recovered its hashing power, eventually controlling a majority of the computing power on the Monero network. 

“This event marks a pivotal moment in the crypto industry,” Qubic spokespeople continued, while highlighting the takeover of a $6 billion privacy protocol by a $300 million AI protocol.