Kraken has suspended Monero deposits after confirming that a single mining pool seized control of more than half of the network’s total hashing power, triggering a potential security crisis for one of the crypto industry’s most prominent privacy coins. The move follows reports of a 51% attack, a rare but devastating event that allows attackers to reorganize transactions and potentially double-spend funds.

The controversy erupted when Qubic, an AI-focused blockchain and mining pool, publicly declared it had achieved dominance over Monero’s hashrate. Qubic confirmed that it successfully reorganized six blocks, sparking immediate fears within the crypto community. Although Monero supporters initially downplayed the threat, Kraken acted swiftly, pausing all deposits to safeguard its users.

Monero, valued at roughly $6 billion and ranking as the 29th largest cryptocurrency, has long been a leader in privacy-focused blockchain technology. But the takeover by Qubic, valued around $300 million, marks one of the most dramatic power shifts in recent crypto history. After facing a denial of service (DDoS) attack earlier this month that briefly reduced its hashrate from 2.6 GH/s to 0.8 GH/s, Qubic quickly rebounded and secured majority control.

“This event is a pivotal moment in the crypto industry,” Qubic representatives stated, pointing to the unusual scenario of a smaller AI protocol overpowering a major privacy chain. The situation has sent shockwaves across the digital asset space, raising broader concerns about decentralization, security, and the vulnerability of proof-of-work blockchains.

For now, Kraken has assured users that deposits remain on hold as the network’s integrity is reassessed. The Monero community faces a defining test, with the future stability of the network now under intense scrutiny.