Privacy coin Zcash suffered its worst single-day decline in three months. ZEC dropped 48.51% from its peak, hitting a low of $250.12 before rebounding to around $314.
AI Model Opus 4.8 Exposes Orchard Circuit Flaw
On May 29, security engineer Taylor Hornby, hired by Shielded Labs, reviewed Zcash's Orchard shielded pool circuit using Anthropic's latest AI model Opus 4.8. He identified an under-constrained defect that allowed an attacker to feed arbitrary forged values into an elliptic curve multiplication while still passing verification, theoretically enabling unlimited undetectable counterfeit ZEC. Hornby built a full exploit in a local test environment, confirming the risk. The vulnerability had existed since Orchard's launch in May 2022 — dormant for four years.
Hornby reported the flaw to Zcash Open Development Lab (ZODL). The team coordinated an emergency fix: a soft fork paused Orchard transactions on June 2, followed by the NU6.2 hard fork on June 3, which introduced a corrected circuit and permanently closed the hole. Zcash founder Zooko Wilcox said the likelihood of actual exploitation was "extremely low." A bug that escaped detection for four years was found by an AI model in less than a day.
Arthur Hayes Dumps All ZEC, Declares Holy Trinity Dissolved
BitMEX co-founder Arthur Hayes announced on X that he had sold his entire ZEC position. "Due to the Orchard Pool vulnerability, I had to dump our entire ZEC position," Hayes wrote, declaring the breakup of his "Holy Trinity" portfolio — Hyperliquid, NEAR Protocol, and Zcash. Hayes said he still considers prior exploitation "extremely low" but argued Zcash's privacy guarantees require more than likelihood. "We'll keep reevaluating and if that assumption proves wrong, we'll buy back at lower prices."