Cypherpunk Technologies shares tumbled 37% on Friday as concerns over a Zcash privacy bug hit the Winklevoss-backed firm. The company, which holds $102 million worth of Zcash, saw its stock price fall to 59 cents amid a broader selloff triggered by the disclosure of a four-year-old vulnerability in the privacy-focused cryptocurrency. The bug, discovered through an AI-assisted audit and disclosed by Shielded Labs, prompted an emergency fix this week, though the organization stated it could not guarantee the vulnerability had not been exploited.
Cypherpunk Technologies Stock Falls 37% on Friday
Cypherpunk Technologies shares fell to their lowest level since early March on Friday. The company's stock price (CYPH) dropped 37% to 59 cents, recovering from an intraday low of 53 cents, according to Yahoo Finance. The downturn marked a sudden blow to the Winklevoss twins' crypto holdings, which center around exchange Gemini. GEMI shares fell 4.4% to $4.41 amid signs of broader pressure for U.S. stocks, with the Nasdaq on pace to slide more than 2%.
Cypherpunk Technologies, formerly known as Leap Therapeutics, dedicated itself to buying Zcash late last year. The company has purchased 314,185 Zcash worth $102 million at an average price of $337 per coin.
Shielded Labs Discloses Four-Year-Old Zcash Vulnerability
Shielded Labs disclosed a vulnerability that went undetected for four years before it was discovered by an AI-assisted audit. The organization supporting Zcash deployed an emergency fix this week. Shielded Labs said it could not guarantee that the vulnerability had not been exploited.
The privacy coin changed hands around $329, a 37% decrease over the past day, according to CoinGecko. It had previously hit a multi-year high of nearly $700 in November.
Cameron Winklevoss Defends Zcash Following Bug Disclosure
Cameron Winklevoss said in an X post that "there will be bugs" found in the software behind any blockchain. He added, "What's important is that there are world class researchers focused on hardening the network and staying ahead of the bad guys."
In January, Shielded Labs unveiled that it had received $1.2 million worth of Zcash, representing a second donation from the Winklevoss twins. In an accompanying statement, Cameron said, "We believe strong privacy is an essential property of sound money."
Winklevoss Capital led a nearly $59 million private placement in Cypherpunk Technologies in November.
Cypherpunk Holdings Drop Below Purchase Price
Friday's drop thrust Cypherpunk's Zcash holdings into the red because the company purchased the privacy coin at an average price of $337 apiece. Last month, the company reported a net loss of $77.2 million in the three months ended March 31, citing a swing in the value of its Zcash holdings.
Cypherpunk responded to concerns about potential exploitation of the bug. "There is zero evidence," Cypherpunk said on X. Theoretically, the company added, an attacker would have needed to "sit on counterfeit ZEC through a massive bull run instead of cashing out."
BitMEX co-founder Arthur Hayes noted in an X post that it's "impossible" to assess whether the bug was exploited due to Zcash's privacy features, even if he thinks it's "extremely unlikely." Hayes said he had reduced his entire exposure to Zcash.
FAQ
What caused Cypherpunk Technologies stock to fall on Friday?
Cypherpunk Technologies shares tumbled 37% on Friday due to concerns over a Zcash privacy bug disclosed by Shielded Labs. The vulnerability, which went undetected for four years, prompted an emergency fix this week.
How much Zcash does Cypherpunk Technologies own?
Cypherpunk Technologies owns 314,185 Zcash worth $102 million, purchased at an average price of $337 per coin.
What did Cameron Winklevoss say about the Zcash bug?
Cameron Winklevoss said in an X post that "there will be bugs" found in blockchain software and emphasized that "world class researchers focused on hardening the network and staying ahead of the bad guys" are what matters.
