Nasdaq-listed Cypherpunk Technologies (CYPH) has launched a mining division and says it now holds about 18% of Zcash network hashrate, making it the largest Zcash miner globally, according to the report. The expansion was backed by $33.33 million from Winklevoss Capital, the investment firm tied to the Winklevoss brothers.
$33.33 million deal built through pre-funded warrants
The report said the Winklevoss brothers used a pre-funded warrant structure to obtain rights to about 43.29 million common shares. The exercise price was set at $0.001 per share, while the stock was trading at about $0.77 at the time.
Two limits were attached to the arrangement. First, Winklevoss ownership was capped at 19.99%. Second, only about 5.37 million shares can be issued at this stage, with the remainder requiring shareholder approval before issuance.
That structure, as described in the report, leaves Winklevoss in the role of a strategic backer rather than a direct controller of the company.
Once the deal closed, Cypherpunk received Bitmain Z15 Pro mining rigs. All of the machines were placed in the United States. The report said that setup avoids overseas geopolitical risk and makes US compliance review easier to manage.
Zcash output and Cypherpunk’s expected share
The article put Zcash network issuance at about 1,440 coins per day, or roughly 43,800 per month. Cypherpunk’s current share of hashrate was given as 18%, equal to 4.2 GSol/s.
On that basis, the company would receive about 18 out of every 100 newly mined ZEC, or around 7,800 coins per month.
The report also said that, at the current market price, the mining business touches a market opportunity worth more than $250 million a year. Chief investment officer Will McEvoy said the operation is already cash-flow positive.
Kevin Zhang, who has taken over as head of mining, said current Zcash mining economics are stronger than AI compute hosting and Bitcoin mining at current token prices.
From biotech roots to a privacy-coin strategy
Cypherpunk was previously known as Leap Therapeutics, a biotechnology company focused on cancer drugs. The report said the company now presents three lines of business on its website: coin accumulation, mining, and privacy technology investment, including ZODL.
In that framework, mining is the first step. The second is control of the wallet gateway through ZODL, which the report described as the largest Zcash wallet by user count. The third is treasury accumulation of Zcash itself.
The report compared that approach with MicroStrategy’s Bitcoin accumulation model and said Cypherpunk already holds 323,394 Zcash, equal to 1.92% of circulating supply. Its stated goal is to reach 5% of total network supply.
Why Zcash
The article said the company chose Zcash because it is a privacy coin with optional disclosure. Unlike Bitcoin, where the ledger is openly visible, Zcash uses zero-knowledge proofs and allows users to choose between transparent addresses and shielded ones.
Will McEvoy, Cypherpunk’s CIO and also a partner at Winklevoss Capital, was described as having been placed at Cypherpunk while keeping both roles. He said this model offers a balance between compliance and privacy.
As presented in the report, mining cash flow can then be recycled into additional Zcash purchases, creating a closed internal loop.
Two pressure points: concentration and compliance
The report said Cypherpunk is now walking a line on two fronts.
The first is hashrate concentration. In crypto markets, a single operator controlling close to one-fifth of a network’s hashrate is highly sensitive. The article noted that if a miner’s share rises above 50%, a so-called 51% attack becomes theoretically possible. It also said Cypherpunk, as a Nasdaq-listed company, is highly unlikely to attack the network maliciously. Even so, this level of concentration raises questions about decentralization.
The second issue is regulation. The report said many jurisdictions keep a close watch on privacy coins, and some major exchanges have delisted or restricted Zcash in certain regions. For Cypherpunk, a US-regulated listed company, the question is how large-scale privacy-coin mining will stand up under future compliance review.
The article also said the company’s stock is now closely tied to the price of Zcash. Buying the shares, in that framing, amounts to a bet on both the token’s price and management’s ability to execute.
The report ended by saying the Winklevoss brothers’ $33.33 million commitment is effectively a wager on the future of what it called the financialization of privacy assets. Whether Cypherpunk can reach a 5% Zcash holding, and how regulation develops from here, remains unresolved.