Why Zcash crashed despite the Orchard fix

On May 29, 2026 a security researcher engaged by Zcash developers uncovered a critical bug in the network’s Orchard privacy pool that could have allowed an attacker to mint unlimited, undetectable ZEC. The team disclosed the flaw, disabled the vulnerable component within days and re-enabled a patched circuit via a hard fork by June 1.

No funds were stolen and no inflation was detected, yet the token fell roughly 45% from above $600 to about $314, wiping more than $3 billion from its market value. The key issue is that the vulnerability was both “undetected” and, in principle, “undetectable.” Researcher Taylor Hornby used an advanced AI model to review the Orchard circuit, wrote a working exploit and confirmed in local tests that it could generate unlimited counterfeit ZEC.

Shielded Labs warned that running the same tool on the live network would have produced counterfeit tokens in an attacker’s wallet, and cryptography alone cannot prove whether anyone did so before the patch. The timeline deepened the credibility problem.

zcash, zec, orchard, privacy pool, vulnerability, exploit, taylor hornby, ai model, hard fork, market crash