ZEC's Mover and Shaker's Take on the "Bug Crisis": Arthur Hayes Liquidation, Zooko Staying Mum, Biggest ZEC Treasury Bullish
BlockBeats News, June 5th. Privacy coin Zcash (ZEC) experienced a market sell-off due to a disclosed security vulnerability that could potentially lead to infinite inflation, causing the price to plummet over 50% in a single day. The incident quickly sparked discussions within the crypto industry, with several prominent investors and analysts expressing doubts about the future of privacy coins. Despite the development team emphasizing the very low likelihood of the vulnerability being exploited, the market is concerned that this issue has touched upon Zcash's most fundamental value proposition — its supply auditability.
Arthur Hayes, a prominent KOL known for frequent high-leverage trading calls during this recent ZEC rally, announced earlier today that he has sold all his ZEC holdings due to the Orchard Pool vulnerability. When he first read about the exploit yesterday, he did not realize how it could shatter his narrative understanding of ZEC. However, a subsequent 30% drop in ZEC price prompted a reassessment, leading to a decision to exit all positions at a profit. While he believes the chances of inflation are highly unlikely, he cannot cryptographically disprove the possibility. He plans to continuously reassess his stance and, if his assumption is proven incorrect, will re-enter his position, hoping for a lower price at that time.
As the main proponent of the largest ZEC treasury, Cypherpunk Technologies, and co-founder of Gemini, Tyler Winklevoss, has taken a more indifferent stance towards this event. He mentioned that software inevitably contains vulnerabilities. The essence of software security is an endless race between good and evil, where the side of justice must always stay at least one step ahead of evil. AI has not changed the nature of this cat-and-mouse game; it has only accelerated it. Every piece of software must participate in this race. There is no escape, and there is no team in the world better suited for this race than the Zcash team.
As of May 13, 2026, Cypherpunk holds a total of 314,185.70 ZEC, with an average purchase price of $337.86, representing approximately 1.88% of the total circulating supply of Zcash. Ten days ago, Cypherpunk briefly saw a profit of $100 million, but if they have not sold yet, they are currently facing an unrealized loss of $11.89 million.
It is worth noting that the soaring bull market of ZEC originated from Silicon Valley's renowned angel investor Naval Ravikant openly stating on X, "ZCash can be seen as an alternative to Bitcoin." While he has not deleted the tweet, Naval has not mentioned ZEC in recent days.
