Arthur Hayes Sells Entire Zcash Holdings After Vulnerability Revelation
Arthur Hayes, the chief investment officer of Maelstrom, sold all his zcash (ZEC) holdings after discovering a critical vulnerability in the network's Orchard Pool. The vulnerability, present since 2022, could have allowed for unlimited minting of ZEC tokens, leading to a significant loss in trust and a 42% price drop for ZEC, according to CoinDesk.
Arthur Hayes, the chief investment officer of Maelstrom, has completely liquidated his zcash (ZEC) holdings following the discovery of a significant vulnerability in the network's Orchard Pool. This vulnerability, which was identified by Shielded Labs and had gone unnoticed since 2022, created the potential for an attacker to mint unlimited ZEC tokens, severely undermining confidence in the token's supply integrity.
After the bug was revealed on May 29, 2026, and subsequently patched on June 1, ZEC faced a dramatic decline, plummeting over 40% in value. Hayes remarked that while he initially considered the risk of minting to be extremely low, the inability to cryptographically disprove any possibility of such an exploit made him rethink his position. The crash prompted him to reevaluate the risk and he decided to sell his entire ZEC position, reflecting on the seriousness of the situation.
“I read about the exploit yesterday, and didn't appreciate how it violated my narrative mental map,” said Hayes. “The 30% dump made me rethink, and I had to take profit on the entire position.” Hayes noted that he might consider buying back into ZEC if his concerns turn out to be unfounded, potentially at lower prices in the future.
Additionally, reports from blockchain analytics firm Arkham indicated that a significant investor suffered heavy losses, as one investor's ZEC stash, valued at $174 million, lost over half its worth after being held for six months without selling. The vulnerability and subsequent price collapse have raised broader fears in the crypto community, particularly surrounding issues of trust and integrity in digital asset supply chains.
Alongside zcash’s difficulties, Hayes's decision is part of a larger trend affecting the cryptocurrency market this week, which is experiencing significant downward pressure on major assets. Bitcoin and ether have both seen notable declines, contributing to what could become the worst week for the crypto market since July 2024.
Summary based on original reporting by Olivier Acuna at CoinDesk, originally published Jun 5, 2026. SolanaWire does not republish source content.
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