Zcash (ZEC) lost half its value in 24 hours after developers disclosed a critical vulnerability in the Orchard shielded pool, which enables private transactions using zero-knowledge technology.
Founder Zooko Wilcox-O’Hearn stated the flaw, discovered by researcher Taylor Hornby in May 2026, could have allowed unlimited counterfeit ZEC without detection. An emergency fix was deployed by June 1, but the privacy features make it impossible to confirm if the bug was ever exploited.
ZEC fell from $516 to around $414 after the news. The selloff deepened when BitMEX founder Arthur Hayes announced he had liquidated his entire position, dropping the price to a low of $265. At press time, ZEC trades at $320, down 40%.
Shielded Labs, which hired Hornby for the audit, proposes a network upgrade with turnstile accounting to check for supply anomalies. Hayes left the door open to re-entering, stating, "Privacy is priceless."