ZEC's Mover and Shaker's Take on the "Bug Crisis": Arthur Hayes Liquidation, Zooko Staying Mum, Biggest ZEC Treasury Bullish

June 5. Privacy coin Zcash (ZEC) plummeted over 50% in a single day after a disclosed security flaw that could theoretically enable infinite inflation triggered a widespread selloff, reigniting debate across the crypto industry about the long-term future of privacy-focused digital assets. While Zcash’s development team has downplayed the risk of malicious exploitation—stating the vulnerability is highly unlikely to be acted upon—markets are concerned the flaw undermines one of Zcash’s core value propositions: verifiable supply auditability, a key feature that set the privacy coin apart from many others. Prominent crypto KOL Arthur Hayes, known for high-leverage trading calls that fueled ZEC’s recent rally, announced he sold his entire ZEC holdings today in reaction to the Orchard Pool vulnerability. Hayes initially didn’t grasp how the flaw would upend his bullish narrative for Zcash, but a subsequent 30% price drop prompted him to reevaluate and exit his position at a profit. While he views the chance of inflation as low, he says he cannot cryptographically rule out the risk. Moving forward, he plans to regularly reassess his stance: if his assumption about the vulnerability proves wrong, he will repurchase ZEC, ideally at a lower price. For a more measured take, Tyler Winklevoss—co-founder of Gemini and a key backer of the largest Zcash treasury, Cypherpunk Technologies—framed the news as a reminder that software inherently contains vulnerabilities. He noted that security is an eternal cat-and-mouse game between good and bad actors, accelerated rather than fundamentally changed by AI. “Every piece of software has to run this race,” he said. “No team in the world is better suited for it than Zcash’s development team.” As of May 13, 2026, Cypherpunk holds 314,185.7 ZEC, at an average purchase price of $337.86 per token—equating to roughly 1.88% of Zcash’s total circulating supply. Ten days ago, the firm had seen a $100 million unrealized profit, but if it hasn’t sold any ZEC since, it is now sitting on an unrealized loss of $11.89 million. ZEC’s recent bull run was initially sparked by Silicon Valley angel investor Naval Ravikant, who took to X (formerly Twitter) to state, “ZCash can be seen as an alternative to Bitcoin.” Ravikant has not deleted that tweet, but has made no mentions of ZEC in the days since the vulnerability news broke.