Arthur Hayes dumps entire ZEC position after Orchard Pool…

Arthur Hayes, chief investment officer of Maelstrom, liquidated his entire Zcash (ZEC) position after Shielded Labs disclosed a critical vulnerability in the network's Orchard Pool — a bug present since 2022 that could have allowed unlimited counterfeit ZEC to be minted. ZEC slumped more than 40% in 24 hours following the announcement.

Why it matters

The vulnerability strikes at the core of what makes a privacy coin valuable: supply integrity. Hayes, a vocal ZEC advocate, said the flaw "violated my narrative mental map" and that while he considered an actual exploit extremely unlikely, it could not be cryptographically proven impossible. That epistemic gap was enough to force the exit. Blockchain intelligence firm Arkham noted one large investor lost over half the value of a $174 million ZEC position without selling a single coin in six months. The Orchard Pool bug was discovered May 29 and patched June 1, but the reputational damage is already priced in.

Market impact

ZEC's 40%+ crash lands in the middle of crypto's worst weekly performance since July 2024 — Bitcoin down nearly 15%, Ether off more than 17%, and spot trading volume at its lowest since October 2023. Hayes left the door open to re-entering ZEC "hopefully at lower prices" if his supply-integrity concerns prove unfounded, but the combination of a high-profile exit, a nine-figure paper loss for a long-term holder, and a sector-wide risk-off backdrop makes a near-term recovery an uphill case.