Arthur Hayes dumps zcash holdings after Orchard Pool vulnerability revealed

Hayes said he would reconsider his stance if his assumptions that an exploit is still possible prove to be incorrect.

Arthur Hayes, chief investment officer of Maelstromfund, said he liquidated his entire zcash (ZEC) position after a developer disclosed a potential critical vulnerability in the network's Orchard Pool.

Hayes, who previously championed the privacy token, said on X that while he believed it was extremely unlikely that any minting would take place, it could not be cryptographically proven impossible.

The now-plugged vulnerability was disclosed by Shielded Labs, which said a major issue went undetected for four years and could have allowed a hacker to print unlimited counterfeit tokens, damaging trust in the crypto’s supply and its value. The token slumped following the announcement and was recently down 42% over 24 hours.

“I read about the exploit yesterday, and didn't appreciate how it violated my narrative mental map,” said Hayes. “The 30% dump made me rethink, and I had to take profit on the entire position.”

The vulnerability, present since 2022, was discovered on May 29 and fixed June 1, Shielded Labs said.

Hayes, who also co-founded the BitMex exchange, said he would reevaluate his stance moving forward and that, if his assumptions were proven incorrect, he would buy ZEC again “hopefully at lower prices.”

Blockchain analytics and intelligence firm Arkham wrote on X that one large investor lost over half the value of his $174 million ZEC stash.

“He hasn’t sold ZEC for 6 months. Ouch,” said Arkham.