Kraken Freezes Monero: The 51% Attack That Shook the Crypto World (August 2025)

• What Exactly Happened with Monero and Kraken?
• Why Did This Attack Spark Panic?
• How Did the Crypto Community React?
• What’s Next for Monero and Privacy Coins?
• Could This Happen to Bitcoin or Ethereum?
• Conclusion: A Wake-Up Call for Crypto
• FAQs: Your Monero Attack Questions Answered

In a dramatic turn of events, Kraken—one of the world’s largest cryptocurrency exchanges—halted Monero (XMR) deposits following a suspected 51% attack. The incident, which unfolded in mid-August 2025, saw mining pool Qubic temporarily control over 50% of Monero’s hashrate, triggering chain reorganizations and orphaned blocks. While Kraken’s swift action prevented major losses, the episode reignited debates about the vulnerabilities of mid-sized blockchains and the delicate balance of decentralization. Meanwhile, Monero’s price plummeted, and traders scrambled as regulators watched closely. Below, we dissect the attack, its fallout, and what it means for privacy coins.

What Exactly Happened with Monero and Kraken?

On August 16, 2025, Kraken announced a temporary freeze on Monero deposits after detecting irregular blockchain activity. The culprit? Mining pool Qubic had surged to 51% of Monero’s hashrate—a nightmare scenario for any Proof-of-Work network. This concentration of power allowed the pool to rewrite recent transactions, reorganizing six blocks and leaving ~60 others orphaned. Kraken’s team, led by security analyst, described it as a "textbook 51% attack," though Qubic claimed it was unintentional, blaming a prior DDoS incident that briefly crashed their operations. "When a single entity controls the majority of hashrate, the network’s integrity is at risk," Schmidt noted. "We had to act."

Why Did This Attack Spark Panic?

Monero isn’t just another altcoin—it’s the gold standard for privacy-focused cryptocurrencies. Its obfuscation techniques (like ring signatures and stealth addresses) make transactions untraceable, but even robust cryptography crumbles if the network’s decentralization falters. The attack exposed Monero’s Achilles’ heel: its smaller hashrate compared to giants like bitcoin or Ethereum. Data fromshowed XMR’s price dropping 18% within hours, while TradingView charts revealed frantic sell-offs. "This wasn’t just about stolen funds," said, a prominent community figure. "It was a stress test for Monero’s core promise: censorship-resistant money."

How Did the Crypto Community React?

Chaos erupted on Crypto Twitter. Some, like, dismissed it as FUD: "Qubic’s a reputable pool—this was a fluke." Others, including ethereum co-founder, warned of systemic risks: "Smaller chains must innovate or face extinction." Meanwhile, Monero’s official team faced backlash for delayed communication, fueling conspiracy theories. The irony? Just days earlier, the network had survived a suspected state-sponsored attack. As one Reddit user quipped, "Monero’s like a cat with nine lives… but how many are left?"

What’s Next for Monero and Privacy Coins?

In the aftermath, three trends emerged:

1. Mining Redistribution: Monero’s core team urged miners to decentralize hashrate, tweeting: "Fire up your miners to strengthen the network!"
2. Regulatory Scrutiny: The SEC added XMR to its "watchlist," citing "acute centralization risks."
3. Wallet Exodus: Non-custodial wallets like Best Wallet saw a 200% surge in downloads, per SensorTower data. "Users want control," said Best Wallet’s CTO. "Exchanges can freeze funds; we can’t."

Could This Happen to Bitcoin or Ethereum?

Unlikely. Bitcoin’s hashrate (~450 EH/s) WOULD cost ~$20B to overpower, perestimates. Ethereum’s shift to PoS eliminated 51% risks entirely. But for mid-cap chains, the threat looms large. "Monero’s market cap is ~$2B—that’s hackable for well-funded actors," warnedof Coin Metrics.

Conclusion: A Wake-Up Call for Crypto

Kraken’s freeze may have saved users, but the damage to Monero’s reputation is real. The incident underscores a harsh truth: privacy means little without power distribution. Astweeted: "Monero survived an attack, but the war’s just begun." For investors, the lesson is clear—diversify, verify, and never underestimate the human factor in decentralized systems.