Arthur Hayes, chief investment officer at Maelstromfund, said he liquidated his entire position in zcash (ZEC) after a developer disclosed a possible critical vulnerability in the network’s Orchard Pool.
Hayes, who previously advocated for 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 to be impossible.
The now-fixed vulnerability was revealed 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 supply of crypto and its value. The token plummeted following the announcement and was recently down 42% in 24 hours.
“I read about the exploit yesterday and didn’t realize how it violated my narrative mental map,” Hayes said. “The 30% drop made me reconsider and I had to take profits on the entire position.”
The vulnerability, present since 2022, was discovered on May 29 and fixed on June 1, Shielded Labs said.
Hayes, who also co-founded the BitMex exchange, said he would re-evaluate his stance going forward and if his assumptions were proven wrong, he would buy back ZEC “hopefully at lower prices.”
Blockchain intelligence and analysis firm Arkham wrote in X that a large investor lost more than half the value of his $174 million ZEC reserve.
“You haven’t sold ZEC in 6 months. Ouch,” Arkham said.
