The price of Zcash (ZEC) has dropped by 48% to $302.48 after a critical vulnerability was found in its protocol. This flaw allowed for the infinite and undetectable creation of counterfeit coins.
Hourly chart of ZEC/USDT on Binance. Source: TradingView.The issue was identified in the anonymous Orchard pool by security engineer Taylor Hornby on May 29.
— zooko🛡🦓🦓🦓 ⓩ (@zooko) June 4, 2026
Hornby utilized the Opus 4.8 AI model from Anthropic to analyze the code. He successfully created a working bug that generated tokens in the test network.
Developers at Shielded Labs acknowledged that the issue had existed since the launch of Orchard in May 2022. Due to the privacy features of the blockchain, it is impossible to determine if anyone exploited this vulnerability over the past four years.
The Zcash team fixed the bug on June 1. According to the developers, the vulnerability was unlikely to have been exploited in practice, as it was too complex to discover.
To restore trust, Shielded Labs proposed launching a new secure pool. This will allow for verification of the actual ZEC issuance volume. The organization also plans to conduct formal verification of the Orchard code to mathematically prove the absence of other bugs.
It’s worth noting that in May, the price of the privacy coin first surpassed $585 since November 2025.