Zcash plunges 37% after critical counterfeit bug found in…

Zcash collapsed 37% in one of its worst single-day selloffs on record after Shielded Labs disclosed a critical vulnerability in the token's Orchard privacy pool — a flaw that could have allowed unlimited, undetectable counterfeit ZEC to be minted without any cryptographic trace.

The bug was present since Orchard's activation in May 2022 and was discovered on May 29 by security engineer Taylor Hornby using Anthropic's Opus 4.8 AI model. An emergency patch was deployed by June 1, but the damage to market confidence was immediate and severe.

Why it matters

The core problem isn't the patch — it's the unknowable. Shielded Labs has confirmed there is no cryptographic mechanism to determine whether the flaw was exploited in the three-year window before discovery. That means ZEC's supply integrity is formally unverifiable for that entire period, a devastating admission for a privacy coin whose entire value proposition rests on trustless, auditable scarcity. The team is now proposing a network upgrade with new accounting measures and expanded security efforts to restore confidence.

Market impact

The 37% single-day drop reflects the existential nature of the disclosure — not a routine exploit, but a foundational question about whether ZEC's circulating supply is what it claims to be. Bitcoin is also under pressure, with analysts flagging a potential pullback toward $60,000 as broader crypto sentiment deteriorates. Traders watching ZEC will want to see the network upgrade proposal fleshed out and independently audited before any recovery thesis holds water.