BitMEX co-founder Arthur Hayes announced on X on June 5 that, due to a vulnerability in the Zcash Orchard pool, he has fully liquidated all his ZEC holdings, and provided a complete explanation of the decision logic. Hayes’ core argument is that in the privacy narrative within the context of AI, governments, and large tech companies, what is required is perfect security—not “the possibility of being exploited being extremely low.”
Hayes’ confirmation on X
Based on Hayes’ publicly shared posts on X, the full logic behind his liquidation decision is as follows: although he believes the probability of any forged minting occurring is “extremely unlikely,” he cannot formally prove that it is impossible; the privacy narrative in the context of AI, government, and big tech requires perfection—not merely a low probability; yesterday he read the vulnerability report, and before that he had not realized how the vulnerability violated his “mental map of the narrative.” A 30% sell-off made him reconsider.
Hayes said privacy is priceless; he does not mind buying back at a higher price, nor does he mind admitting that he was wrong in his judgment. He also confirmed that he still holds a WLD (World) position.
Background on the ZEC Orchard vulnerability: key confirmed facts
As background to Hayes’ decision, the confirmed facts disclosed the same day by Zcash founder Zooko Wilcox include: security researcher Taylor Hornby discovered a serious forgery vulnerability in the Orchard pool on May 29, 2026; ZODL coordinated an emergency patch, and the vulnerability was fully fixed on June 2, 2026; the vulnerability has existed since the Orchard pool launched in May 2022; Hornby successfully generated unlimited forgery ZEC in a local test environment that could not be detected.
Because Orchard’s privacy properties make it impossible to cryptographically confirm whether the vulnerability had been exploited on the mainnet before it was fixed, Shielded Labs is preparing a network upgrade plan, and intends to publish a detailed proposal next week.
FAQ
Why did Arthur Hayes liquidate anyway despite the vulnerability having an extremely low chance of being exploited?
According to Hayes’ public statement, his holding logic is based on ZEC’s privacy narrative in the context of AI, government, and big tech; this narrative requires “perfect” security rather than “low probability of exploitation.” Once any security uncertainty exists that cannot be ruled out cryptographically, the narrative foundation for holding is shaken—so regardless of how low the actual exploitation probability is, it is enough to trigger his liquidation decision.
Did Hayes completely abandon ZEC, or is there a possibility of buying back?
According to Hayes’ public statement, he explicitly said he will continue to re-evaluate, and if the assumption is proven wrong, he is willing to buy back—“hoping” it can be at a lower price—while also stating that he does not mind buying back at a higher price. His wording is “taking profits” and “rethinking,” rather than a permanent abandonment of the ZEC position logic.
After Hayes liquidated ZEC, what confirmed changes occurred in his cryptocurrency holdings?
According to Hayes’ public statement, he confirmed he has fully liquidated all his ZEC holdings, and also confirmed that he still holds a WLD (World) position. Hayes did not mention any specific changes to any other positions.
