- Hayes exited ZEC after Orchard’s privacy bug raised doubts about the bid.
- He also liquidated HYPE and NEAR while rotating his portfolio.
- The Zcash vulnerability has been patched, but it cannot be ruled out that it will be exploited in the future.
BitMEX co-founder Arthur Hayes has completely exited his positions in Zcash (ZEC), Hyperliquid (HYPE), and NEAR Protocol (NEAR).
This decision comes at a time when the cryptocurrency market is still digesting the implications of the flaw in the Orchard security pool, a key component of Zcash’s privacy system.
The move has drawn attention across the digital assets space, not only due to Hayes’ profile as a macro investor, but also due to the nature of the vulnerability, which has raised questions about the integrity of ZEC’s supply mechanisms within its protected environment.
Orchard vulnerability raises uncertainty in Zcash
The reason behind the sale was a vulnerability discovered in the Orchard secure pool, which was designed to enable private transactions on the Zcash network using zero-knowledge proofs.
This issue raised concerns that, under certain circumstances, it might have theoretically been possible to create a counterfeit ZEC within the protected system without immediate detection.
While Zcash developers moved quickly to deploy an emergency patch, the primary concern was not just the existence of the bug itself, but the inability to verify whether it had been exploited before fixing it.
Because protected transactions are designed to be private, there is no straightforward way to retroactively audit all activity in a way that can definitively rule out past abuse.
The market reaction was immediate and sharp.
ZEC saw heavy selling, with Its price fell by more than 45% during the peak of the reaction.
Liquidity quickly dwindled as traders rushed to reduce exposure to the asset suddenly, creating uncertainty about the safety of supply.
The incident reignited a long-standing debate about privacy-focused blockchain systems.
While zero-knowledge proofs are widely considered one of the strongest cryptographic tools available for privacy, they also introduce complexity that can make historical verification of state changes much more difficult compared to transparent blockchains.
Arthur Hayes comes from ZEC, HYPE and NEAR
Against this background, Arthur Hayes confirmed that he had completely liquidated his holdings in ZEC.
Hayes also closed positions in HYPE and NEAR, suggesting a broader portfolio adjustment rather than an individual asset reaction.
Hayes described the situation in frank terms, noting that what he had previously referred to as his thesis about the “Holy Trinity” no longer held.
The main issue for Hayes was not confirmed exploitation. Instead, there was unresolved uncertainty.
Even with a patch, the inability to prove whether a counterfeit version occurred before the fix has created a level of risk that privacy assets are no longer willing to take.
The Holy Trinity has died. Unfortunately, due to the exploitation of Orchard Pool, I had to get rid of everything we had A dollar like you bag.
– Although I think it is very unlikely that any minting occurred, the impossibility of encryption cannot be officially proven
Privacy from AI, government, and the grand tech narrative demands perfect…– Arthur Hayes (@CryptoHayes) June 5, 2026
Along with the ZEC exit, Hayes also liquidated positions in HYPE and NEAR.
While no direct technical connection between those assets and the Zcash vulnerability has been identified, the concurrent sell-off suggests a broader repositioning of capital rather than an isolated reaction.
