Kraken, Monero, and the 51% Wake-Up Call
Kraken froze Monero deposits on August 15, 2025, because one pool, Qubic, claimed it had over 50% of the hashrate and pulled off a six-block reorg. That means six blocks of Monero history got rewritten, and around sixty others were trashed. Kraken smelled the problem and shut the doors on deposits. They left trading and withdrawals open, but deposits are exactly where an exchange gets wrecked in a reorg. Cointelegraph.
The Monero devs tried to play it down. That’s cute, but it misses the point. If one pool can even brush up against 50% of the network, that’s a live weapon on the table. Whether it fired a shot or not doesn’t matter. The danger is real. This attack has been talked about for years on underground chats, and yet no one has been able to stop it. The problem isn’t limited to just one spot; it’s pervasive throughout the entire decentralized world.
Let me explain this so even someone brand new gets it. A blockchain is like a bunch of guys flipping coins. Whoever has the most coins wins the vote on what the “truth” is. If I walk in with more coins than all of you combined, I get to decide history. That’s a 51% attack. I can send Monero to Kraken, get credited, then secretly rewrite the chain so it looks like I never sent it. I keep my coins, and I walk away with Kraken’s credit, too. It’s the blockchain version of robbing a bank with a time machine. That’s why Kraken had to freeze things; they don’t want to get taken for millions.
The other move is to stop trusting a single node. Run three, four, five nodes in different datacenters, different ISPs, different operating systems. Why? Because of the eclipse attack. That’s when I don’t need 51% hash at all, I just surround your node with fake peers and feed you my fork. You think you’re seeing the real Monero network, but really, you’re looking at my little sandbox. I can double-spend against you all day. Trail of Bits wrote about this in Bitcoin, and it applies here too. A quorum of nodes makes it way harder to lie to you.
Eclipse hardening matters too. Control who your nodes talk to, rotate connections, and don’t let just anyone feed your node blocks. If you don’t, I don’t need hashpower at all, I just cut off your view and hand you whatever “truth” I want. In any decentralized protocol, this is a major flaw.
On top of that, the protocol itself needs hardening. Selfish mining, where attackers withhold blocks and then release them strategically.. still a viable play. Go read the Cornell paper if you think it’s fake Eyal & Sirer, 2013. Combine that with eclipse risks and weak peer selection, and you’ve got holes big enough that even a novice hacker could exploit. Encrypt peer-to-peer connections, build fork alert systems, and stop pretending this is handled.
Reorgs deeper than two blocks? Sudden orphan spikes? A pool taking a third of the network or more? Nodes disagree on what the tip is? All of these are red flashing alarms that should trigger automatic defenses. If you’re ignoring them, you’re already compromised.
So here’s the bottom line. Kraken paused because they were smart enough to know better. But this whole thing proves what I’ve been saying: the assumptions everyone makes about security are garbage when mining power gets centralized. You don’t need to argue whether Qubic really had 51% for long enough. The fact that they could even claim it and back it up with a six block reorg is enough proof.
Chains have become mainstream. You know what that means? It means it’s open season for people messing with the chains, and all decentralized networks are on the table.