Arthur Hayes Sells Zcash Stake After Orchard Pool Vulnerability Disclosure

Arthur Hayes, chief investment officer of Maelstrom and co-founder of BitMEX, said he liquidated his entire zcash position after a developer disclosure revealed a critical vulnerability in Zcash’s Orchard Pool. The issue was disclosed by Shielded Labs and had been present since 2022 before being fixed on June 1, according to the report.

The development matters because the vulnerability touched one of the most sensitive questions for any cryptocurrency: confidence in supply integrity. Shielded Labs said the flaw could have allowed an attacker to create unlimited counterfeit ZEC, a scenario that would directly threaten trust in the token’s scarcity and market value.

Hayes said he believed actual minting was extremely unlikely, but that it could not be cryptographically proven impossible. He said the disclosure challenged his prior view of the asset and that a sharp sell-off in ZEC prompted him to take profit on the full position.

ZEC fell heavily after the disclosure, with CoinDesk reporting the token was recently down 42% over 24 hours. Blockchain analytics firm Arkham also noted that one large investor had lost more than half the value of a $174 million ZEC stash.

Hayes left open the possibility of buying zcash again if his assumptions about the vulnerability are proven wrong. For now, the episode highlights how quickly technical uncertainty can become a market issue for privacy-focused crypto assets.