Kraken Suspends Monero Deposits Following 51% Attack
Kraken, a well-known cryptocurrency exchange, has temporarily halted Monero (XMR) deposits after a privacy-focused blockchain experienced a 51% attack that threatens its security.
A 51% attack occurs when a single mining pool holds more than half of the total hash power in a blockchain network. This situation can lead to double-spending and transaction reordering. Kraken stated on Friday:
“As a security measure, we have suspended Monero deposits after noticing that a single mining pool had gained control of over 50% of the total hash power in the network. This concentration poses a potential risk to the network’s integrity.”
On Monday, the Layer-1 AI-oriented blockchain and mining pool, Qubic, announced it had taken control of most of Monero’s hashrate, having reorganized six blocks. They urged the Monero community to reject these attacks.
Monero is recognized as a leading protocol for privacy, ranking as the 29th largest by market capitalization. According to CoinMarketCap, the ongoing 51% attack has sent shockwaves through the Monero community, eliciting various responses.
Concerns Over Mining Pool Control
A spokesperson from Qubic stated, “After a month filled with high-stakes technical challenges, Qubic has achieved a 51% advantage in Monero’s hashrate and successfully reorganized its blockchain.” This statement was made on Tuesday.
Initially, Qubic’s attempt to take over was denied, leading it to become the seventh largest miner on the protocol, followed by an attack on August 4 believed to be a denial-of-service (DoS) assault.
A DoS attack floods your system with fake incoming traffic, hindering its performance and generating real traffic issues.
After the DoS attack, Qubic’s hashrate plummeted from 2.6 Gigahash per second (GH/s) to just 0.8 GH/s, as reported by Sergey Ivancheglo, someone who took credit for the 51% attack. Nonetheless, the Qubic pool was able to regain its hash power and ultimately dominate the computing capacity on the Monero network.
“This incident is a significant moment in the crypto world,” the Qubic spokesperson added, referencing the acquisition of $6 billion in privacy protocols facilitated by a $300 million AI protocol.
