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Ahmed Barakat
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Arthur Hayes, the co-founder of BitMEX, confirmed today that he liquidated his entire position in Zcash (ZEC) after the protocol problem in Orchard Pool. Zcash’s core shielded transaction layer bug was exposed publicly, causing ZEC to suffer several weeks ago.
The move completes the complete elimination of its self-described ‘Holy Trinity’ portfolio, which previously included the HYPE and NEAR tokens.
The central question that the market is asking now is not whether Hayes was right to get out, the mistake is real, the risk is documented, but whether this was a risk assessment of the eye risk or a quick exit after the risk shook his faith in private funds as a group.
The evidence points strongly to the past. This distinction is important to anyone trying to read this outpouring as a sign.
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The Orchard Pool Bug: What the Threat Means for ZEC
The Orchard Pool is the next secure Zcash community, which was launched with the NU5 upgrade in May 2022.
It replaced the old Sapling pool and introduced untrusted zk-SNARKs via Halo 2’s authentication software, no trust installation required. The pool exists primarily to facilitate encryption transfers, and its cryptographic logic is not apparent; That is the whole concept of ZEC value.
The problem, which was identified on May 29, 2026, by security engineer Taylor Hornby of Shielded Labs, using AI-assisted validation methods including Anthropic’s Claude Opus 4.8, was an insufficient constraint on elliptic-curve multiplication within halo2_gadgets crate.
In simple terms, a specially crafted input can bypass the check and generate a fake ZEC that still passes Orchard’s verification.
An emergency hard fork was opened on June 3, 2026, documenting the bug. But the window from the NU5 activation in 2022 to the June 2026 patch represents almost four years during which the error remained undetected, surviving the analysis of several experts.
Here is the important part for owners: due to Orchard’s architecture, it is impossible to guarantee that a fake ZEC has not been created in that window.
There is no evidence of exploitation, but the inability to ensure complete integrity is not a footnote; This is very difficult in the clear story of the investment that Electric Coin Co. has made a round of ZEC.
Hayes Exits Zcash: Protocol Risk Reaction or Same Model Playing Again?
Hayes has publicly declared that Zcash is the most reliable, part of the ‘Holy Trinity’ alongside HYPE and NEAR, the trio he created as his asymmetric altcoin bet.
They had already removed the HYPE and NEAR Before turning to ZEC, a policy that some say is a way to reduce risk rather than panic.
The ZEC exit followed the disclosure of the Orchard bug and the June 3 hard fork, meaning that Hayes made the move after it was discovered, not before.
His reasoning was specific: ‘The possibility of illegal minting is very low, but it cannot be guaranteed to be impossible,’ he wrote. Also: ‘The issue of protecting privacy from AI, governments, and Big Tech demands perfection, a standard that this bug underestimated.’
That preparation is not due to the traders. It is a thesis statement. Hayes was long ZEC because private equity has unique ideas and technical skills, and this niche requires a private guarantee that Orchard can no longer provide without qualifications.
The example here is familiar to anyone who has followed the life of Hayes. A new feeling, accepted by the people, is the pure flow when the fixed idea is broken. Whether this is risk management or a ‘shill, pump, dump, repeat’ strategy this site has already been written about as a decision, but the Orchard bug makes this exit strategy more difficult to resist than most. They continue to hold Worldcoin (WLD), which was not part of the Trinity.
ZEC Price and Market Structure: The Crashes and Realities
ZEC has fallen 30-36% from its recent highs after the public disclosure, dropping from above $600 to around $390, removing over $3 billion from the market.
The move broke the 20-day, 50-day, and 100-day EMAs in a row, and traders are now looking at the 200-day EMA support near $367 as the next critical area.
Hayes’ exit itself was done on a regular basis, meaning that his position did not move the price mechanically; The market was already priced in the accident protocol before its announcement arrived.
The structural reading is low until the $430-$450 zone is returned to the close. Below $367, ZEC is entering uncharted technical territory with little historical support.
