Arthur Hayes, Chief Investment Officer of Maelstromfund, said he liquidated his entire zcash (ZEC) position after a developer disclosed a potentially critical vulnerability in the network’s Orchard Pool.
Hayes, who previously championed the privacy token, told X that while he thought it was extremely unlikely that any minting would take place, it could not be cryptographically proven impossible.
The now-plugged vulnerability was disclosed by Shielded Labs, which said a major issue went undetected for four years and could have allowed a hacker to print unlimited counterfeit tokens, damaging confidence in the crypto’s supply and its value. The token fell after the announcement and recently dropped 42% over 24 hours.
“I read about the exploit yesterday and didn’t appreciate how it violated my narrative mental map,” Hayes said. “The 30% dump made me rethink and I had to take profit on the whole position.”
The vulnerability, which has been present since 2022, was discovered on May 29 and patched on June 1, Shielded Labs said.
Hayes, who also co-founded the BitMex exchange, said he would reassess his position going forward and that if his assumptions were proven wrong, he would buy ZEC again “hopefully at lower prices.”
Blockchain analytics and intelligence firm Arkham wrote on X that a major investor lost over half the value of his $174 million ZEC stash.
“He hasn’t sold ZEC in 6 months. Ouch,” Arkham said.
