ZEC Price Drops 30% Due to Bug in Zcash Network

The price of the Zcash (ZEC) cryptocurrency plummeted after new details were released about a serious vulnerability in the Orchard pool. This bug could theoretically allow malicious actors to mint an unlimited amount of fake ZEC tokens. Security engineer Taylor Hornby, hired by Shielded Labs, identified this flaw on May 29 and reported it to the Zcash Open Development Lab (ZODL). As a result, an emergency hard fork was implemented on the network on June 3 to resolve the issue. According to Cointelegraph.com reports .

However, concerns that someone might have exploited this vulnerability, which has existed since May 2022, negatively impacted the market. In the last 24 hours, the ZEC price dropped by more than 30%, falling to $410. The project's market capitalization lost over $3 billion. BitMEX co-founder Arthur Hayes announced that he sold all his ZEC assets following this news.

Security researchers note that Taylor Hornby used the Claude Opus 4.8 artificial intelligence model to analyze this vulnerability. A mathematical error in the Orchard scheme allowed bypassing the cryptographic verification process for transactions. Taylor tested this bug in practice and proved that it was possible to create an infinite amount of fake ZEC.

The main problem is that, due to the privacy features of the Orchard pool, it is cryptographically impossible to determine whether anyone exploited the bug before it was fixed. Although Arthur Hayes suspects that illegal coins were minted, he acknowledged that this cannot be completely ruled out. Currently, a decline in investor confidence in the Zcash ecosystem is being observed.