{"id":3647,"date":"2026-06-05T22:32:50","date_gmt":"2026-06-05T22:32:50","guid":{"rendered":"https:\/\/blog.coinsignals.net\/?p=3647"},"modified":"2026-06-05T22:32:50","modified_gmt":"2026-06-05T22:32:50","slug":"arthur-hayes-sells-entire-zcash-position-following-discovery-of-critical-vulnerability","status":"publish","type":"post","link":"https:\/\/blog.coinsignals.net\/index.php\/2026\/06\/05\/arthur-hayes-sells-entire-zcash-position-following-discovery-of-critical-vulnerability\/","title":{"rendered":"Arthur Hayes Sells Entire Zcash Position Following Discovery of Critical Vulnerability"},"content":{"rendered":"\n
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Although the vulnerability was patched within days, developers admitted there is still no way to definitively prove it was never exploited before the fix was implemented.<\/p>\n\n\n\n

A newly discovered security flaw in Zcash\u2019s Orchard privacy pool sent shockwaves through the cryptocurrency market on June 5, leading BitMEX co founder Arthur Hayes to liquidate his entire ZEC position just hours after the details became public.<\/p>\n\n\n\n

The incident has reignited a longstanding debate surrounding privacy focused cryptocurrencies and whether users can fully trust systems where certain supply related exploits could remain undetected for extended periods.<\/p>\n\n\n\n

Hayes Exits as Zcash Developers Move to Reassure Users<\/strong><\/p>\n\n\n\n

In a post on X, Hayes declared that \u201cThe Holy Trinity is dead\u201d and confirmed that he had sold all of his ZEC holdings after reports emerged about the Orchard Pool vulnerability.<\/p>\n\n\n\n

The issue was first disclosed by Zcash founder Zooko Wilcox and members of Shielded Labs. They revealed that security researcher Taylor Hornby discovered the flaw on May 29.<\/p>\n\n\n\n

According to the development team, an attacker could have exploited the vulnerability to create unlimited counterfeit ZEC within Orchard, Zcash\u2019s shielded transaction pool, without immediate detection.<\/p>\n\n\n\n

Developers acted quickly and released a fix by June 1. However, a significant concern remains. Due to Orchard\u2019s privacy preserving architecture, there is no cryptographic method to verify whether the vulnerability had been exploited before the patch was deployed. This uncertainty appears to have been the key reason behind Hayes\u2019 decision to exit his position.<\/p>\n\n\n\n

Hayes acknowledged that while he believed unauthorized minting was highly unlikely, it could not be cryptographically ruled out. He argued that privacy focused cryptocurrencies require absolute certainty rather than a low probability of failure.<\/p>\n\n\n\n

The market reacted sharply. Data from CoinGecko showed that ZEC fell by more than 35 percent over the past 24 hours, dropping to approximately $386 after reaching as high as $611 during the same period.<\/p>\n\n\n\n

The token has also declined nearly 27 percent over the past week and more than 40 percent over the last two weeks. Trading activity surged by almost 46 percent as investors reassessed risk, pushing daily spot trading volume above $1.7 billion.<\/p>\n\n\n\n

Meanwhile, data from CoinGlass indicated that the volatility triggered nearly $49 million in liquidations over the previous 24 hours. Long positions accounted for more than $41 million of those losses.<\/p>\n\n\n\n

This marks the second time in recent days that Hayes has exited a position shortly after expressing optimism. Just a day earlier, he disclosed that he had sold his HYPE and NEAR holdings despite previously suggesting that HYPE could eventually reach $150.<\/p>\n\n\n\n

Supply Integrity Concerns Resurface<\/strong><\/p>\n\n\n\n

The vulnerability sparked mixed reactions across the cryptocurrency community.<\/p>\n\n\n\n

Investor Udi Wertheimer argued that privacy coins face a unique risk compared to transparent blockchains because counterfeit issuance can remain hidden for long periods. He referenced a previous Zcash inflation bug that was only disclosed years after it had existed.<\/p>\n\n\n\n

Others adopted a more measured perspective. Mert Mumtaz, chief executive of Helius, noted that major software vulnerabilities have appeared across the cryptocurrency industry, including in Bitcoin. He emphasized that the central question is whether the flaw was exploited before the patch was released.<\/p>\n\n\n\n

Mumtaz also highlighted that Zcash developers are working on a future network upgrade that could help verify the integrity of the circulating supply through migration to a new shielded pool.<\/p>\n\n\n\n

Meanwhile, Barry Silbert defended the project against criticism. The founder of Digital Currency Group argued that the public disclosure demonstrated the effectiveness of Zcash\u2019s security processes rather than exposing a failure.<\/p>\n\n\n\n

Commenting on the broader threat landscape, Silbert stated, \u201cThe AI enabled assault on blockchains is here, and I\u2019m proudly on Team Zcash.#crypto#cryptonews https:\/\/coinsignals.net<\/a> https:\/\/t.me\/coinsignalpublic<\/a><\/p>\n","protected":false},"excerpt":{"rendered":"

Although the vulnerability was patched within days, developers admitted there is still no way to definitively prove it was never exploited before the fix was implemented....<\/p>\n","protected":false},"author":1,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[1],"tags":[],"class_list":["post-3647","post","type-post","status-publish","format-standard","hentry","category-uncategorized"],"_links":{"self":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts\/3647","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/users\/1"}],"replies":[{"embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/comments?post=3647"}],"version-history":[{"count":1,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts\/3647\/revisions"}],"predecessor-version":[{"id":3649,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/posts\/3647\/revisions\/3649"}],"wp:attachment":[{"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/media?parent=3647"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/categories?post=3647"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/blog.coinsignals.net\/index.php\/wp-json\/wp\/v2\/tags?post=3647"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}