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The Kraken XMR suspension has rattled the crypto industry, as the U.S. exchange abruptly paused Monero deposits following a disputed 51% attack claim from Qubic. While Kraken framed the move as a precautionary measure, the decision has reignited long-running debates over privacy coins, network security, and the risks centralized exchanges face when handling controversial assets.
The move follows controversial claims by AI-driven crypto protocol Qubic that it executed a 51% attack on Monero’s privacy-focused blockchain.
In a statement, Kraken confirmed the suspension of Monero deposits, citing user protection and network security as its top priorities.
However, the exchange stressed that trading and withdrawals remain unaffected, ensuring liquidity for its customers while the situation unfolds.
This marks one of the most significant disruptions for Monero in recent years, sparking renewed debate over mining centralization and blockchain resilience.
The Kraken XMR suspension does not extend to withdrawals or trading. Kraken emphasized that this is a precautionary freeze while it monitors the Monero network for stability.
“Our priority is always the safety of our clients. Deposits will resume once the network’s integrity can be fully verified,” a Kraken spokesperson told CoinDesk.
The suspension comes after Qubic, led by former IOTA co-founder Sergey Ivancheglo, claimed on August 14 that it had briefly gained majority control of Monero’s hashing power — a situation known as a 51% attack.
Qubic alleged that its control enabled it to reorganize six blocks and orphan around sixty others in a two-hour timeframe.
The protocol reportedly mined nearly 80% of Monero’s blocks during the window, producing roughly 750 XMR and 7 million XTM.
Ivancheglo defended the claim, stating:
“This incident underscores the importance of decentralization in Monero’s mining ecosystem. No single entity should exceed 25% of the network’s hashrate.”
However, Monero developers and community members fiercely disputed the claim. Critics argue Qubic never exceeded 35% of Monero’s hashrate and instead relied on selfish mining strategies, which differ from a true majority attack.
Adding fuel to the fire, Qubic’s website reportedly suffered a DDoS attack following its announcement, as tensions within the Monero community boiled over.
Data from Mining Pool Stats shows that Qubic currently controls 2.04 GH/s of Monero’s total 6.00 GH/s hashrate, making it the single largest miner.
While not an outright majority, the concentration still raises serious questions about decentralization risks in Monero’s proof-of-work model.
“Any time one miner edges close to dominance, the integrity of the blockchain can be questioned,” said blockchain analyst Jason Brett in comments to Forbes. “The Kraken XMR suspension is a direct reflection of these underlying concerns.”
Despite the Kraken XMR suspension and heated debate, Monero’s price has shown surprising resilience. According to data from BeInCrypto, XMR surged over 10% in 24 hours, reaching $264 at the time of writing.
This price rally suggests that traders remain confident in Monero’s long-term fundamentals, particularly its reputation as one of the most privacy-focused cryptocurrencies available.
Monero’s anonymity features — which obscure sender, recipient, and transaction amounts — continue to drive adoption among privacy-conscious users.
The Kraken XMR suspension underscores two key challenges facing crypto exchanges and blockchain projects alike:
User Protection vs. Decentralization Risk – Exchanges must act swiftly to protect users in times of uncertainty, but suspensions can also dent confidence in network reliability.
Transparency vs. Anonymity – Monero’s strong privacy tools make it attractive to users but also expose it to frequent scrutiny from regulators and critics.
With Monero under the spotlight, exchanges and developers may be forced to revisit how decentralization safeguards can prevent similar future controversies.
Kraken has not provided a timeline for lifting the XMR suspension, but indicated that deposits will be re-enabled once stability is confirmed. Meanwhile, Monero developers continue to challenge Qubic’s claims, emphasizing the network remains secure.
External analysts suggest the incident may fuel broader discussions about proof-of-work mining vulnerabilities in privacy coins.
For now, Monero traders are keeping faith. As one user posted on Reddit’s r/Monero:
“We’ve seen FUD before. Monero’s resilience is exactly why it continues to thrive.”
The Kraken XMR suspension represents more than just a temporary halt in deposits. It highlights ongoing tensions between decentralization, mining security, and market confidence.
While Qubic’s claims remain disputed, the incident is a wake-up call for Monero’s community and a reminder of the fragile balance blockchain networks must maintain.
