Arthur Hayes Sells Zcash Assets Following Orchard Pool Security Flaw Discovery

Hayes indicated he might reassess his position if his beliefs about the exploit’s potential are found to be incorrect.

What to know:

— Arthur Hayes, the chief investment officer of Maelstrom, announced that he liquidated his entire zcash position after a serious vulnerability was revealed in the network’s Orchard Pool.

— The flaw, identified by Shielded Labs and existing since 2022, had the potential to enable unlimited ZEC minting. Consequently, the token fell more than 40% in value.

— Hayes expressed that this incident eroded his trust in the integrity of ZEC’s supply, but he mentioned that he could reinvest if his concerns turn out to be unfounded.

Arthur Hayes, chief investment officer of Maelstromfund, stated he sold off all his zcash (ZEC) holdings after a developer brought to light a possible critical vulnerability in the network’s Orchard Pool.

Hayes, who had been a strong supporter of the privacy-focused token, shared on X that while he believed it was highly improbable that any minting would occur, it could not be definitively proven as impossible.

The now-resolved vulnerability was disclosed by Shielded Labs, which reported that a significant issue had gone unnoticed for four years and could have permitted a hacker to generate unlimited counterfeit tokens, undermining trust in the cryptocurrency’s supply and market value. Following the announcement, the token saw a decline of 42% within 24 hours.

“I learned about the exploit yesterday, and it challenged my established narrative,” Hayes said. “The 30% drop prompted me to reconsider, and I had to secure profits from my entire position.”

The vulnerability, which had been present since 2022, was identified on May 29 and patched on June 1, according to Shielded Labs.

Hayes, also a co-founder of the BitMex exchange, mentioned that he would reevaluate his perspective going forward and that if his assumptions are proven wrong, he would consider purchasing ZEC again “ideally at lower prices.”

Blockchain analytics and intelligence firm Arkham noted on X that one significant investor lost more than half the value of his $174 million ZEC portfolio.

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