Arthur Hayes, chief investment officer of Maelstromfund, said he liquidated his entire zcash ($ZEC) position after a developer disclosed a potential critical vulnerability in the network’s Orchard Pool.
Hayes, who previously championed the privacy token, said on X that while he believed 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 trust in the crypto’s supply and its value. The token slumped following the announcement and was recently down 42% over 24 hours.
“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.”
The vulnerability, present since 2022, was discovered on May 29 and fixed June 1, Shielded Labs said.
Hayes, who also co-founded the BitMex exchange, said he would reevaluate his stance moving forward and that, if his assumptions were proven incorrect, he would buy $ZEC again “hopefully at lower prices.”
Blockchain analytics and intelligence firm Arkham wrote on X that one large investor lost over half the value of his $174 million $ZEC stash.
“He hasn’t sold $ZEC for 6 months. Ouch,” said Arkham.