Arthur Hayes says his fund Maelstrom has sold its entire Zcash position after new disclosures around the Orchard Pool vulnerability sharpened the perceived risk around ZEC's monetary integrity. The move ends his recent "Holy Trinity" trade across ZEC, NEAR and HYPE, while leaving Worldcoin as the AI-linked bet the fund still holds.
"The Holy Trinity is dead," Hayes wrote on X. "Sadly due to the Orchard Pool exploit, I had to dump our entire ZEC bag."
The sell-off followed a detailed statement from Zooko Wilcox, Jason McGee and Taylor Hornby describing a critical vulnerability in Zcash's Orchard pool. The vulnerability could have been exploited to undetectably create an unlimited amount of counterfeit ZEC within Orchard. Because of Orchard's privacy properties, there is no way to cryptographically prove whether the vulnerability was exploited while it existed.
JOSH SWIHART, founder and CEO of Zcash Open Development Lab, described the bug as a soundness failure in the proof system. The emergency fix required coordinated network action to disable Orchard actions temporarily and restore them with a corrected circuit. The remediation may have closed the vulnerability, but for a privacy asset, residual uncertainty undermines confidence.
Hayes said the roughly 30% selloff in ZEC forced him to reassess. "The 30% dump made me rethink, and I had to take profit on the entire position." His logic: the privacy thesis attached to ZEC requires a higher standard than probabilistic reassurance.
The sale completes a rapid reversal from Hayes' May 22 "Holy Trinity" call when he grouped HYPE, ZEC and NEAR as a three-token basket. HYPE represented the on-chain derivatives trade, NEAR the AI and chain-abstraction angle, and ZEC the privacy leg. Hayes had already dumped his HYPE and NEAR positions, citing higher energy prices and political risk around AI.
Still, Hayes didn't close the door on Zcash. "We will consistently re-evaluate our thinking and if my assumptions are proven incorrect, will rebuy, hopefully at lower prices." For now, Worldcoin is the remaining public expression of his AI-linked rotation. "We still hold WLD and are excited for Lord Elon to pump our bags." At press time, ZEC was down more than 45% in 24 hours.