Morning Minute is a daily newsletter authored by Tyler Warner. The views and analysis expressed are his own and do not necessarily represent those of Decrypt. Also, check out our new daily news show that summarizes the top stories in just 5 minutes, available on Apple Pod or Spotify.
Good morning!
Here are today’s highlights:
- Bitcoin remains stable while other major cryptocurrencies decline; BTC priced at $62.5k
- First positive net inflows for BTC ETFs since May 14
- ZEC experiences a 43% drop following confirmation of an exploit
- The first Bitcoin mortgage backed by Fannie Mae has been finalized
- Pump Fun introduces Pump Fun Go, a new marketplace for bounties
🚩 Security Flaw in ZCash Identified by Whitehat Using Claude Opus 4.8
On May 29, Taylor Hornby, a security researcher, uncovered a serious vulnerability in Zcash’s Orchard privacy pool that could enable an attacker to create an unlimited amount of counterfeit ZEC.
Hornby, contracted by the ZCash team for this purpose, utilized Anthropic’s Claude Opus 4.8 to discover the flaw. By June 1, the Zcash team had implemented an emergency patch to address the issue, which had been vulnerable for four years.
Details of the Vulnerability: The Orchard pool, Zcash’s most sophisticated shielded transaction layer launched in May 2022, employs zero-knowledge proofs to authenticate transactions without disclosing amounts or participants. The flaw essentially involved a specific validation check that failed to enforce the rules it was supposed to. An attacker could submit false inputs that would be accepted, allowing them to generate ZEC without any legitimate backing, with the ZK proof system erroneously validating the fraudulent transaction.
With the help of Opus 4.8, Hornby created a fully functional exploit. He tested it locally and confirmed that it produced unlimited, undetectable counterfeit ZEC, indistinguishable from genuine coins. Instead of exploiting it on the mainnet, he promptly reported it to ZODL, Zcash's development coordination body.
— zooko🛡🦓🦓🦓 ⓩ (@zooko) June 4, 2026
Why the Exploit's Impact is Uncertain: Due to the privacy features of Orchard, it is impossible to cryptographically ascertain if this vulnerability was exploited between May 2022 and June 2026. The same privacy attributes that enhance Orchard's value also render any exploitation undetectable.
The team that engaged Hornby now suggests that previous exploitation is improbable. The bug had evaded years of examination by top cryptographers, its discovery relied on advanced AI tools available only to ethical hackers, and the timeframe for remediation was limited. However, they emphasized that users should not solely depend on their evaluation.
Next Steps: Shielded Labs is suggesting a Network Upgrade that would roll out a new shielded pool and apply “turnstile accounting” to all coins from the Orchard pool. This would require every existing Orchard coin to undergo a verifiable checkpoint, revealing any counterfeit supply. The implementation of this requires broad support from the community and adherence to Zcash's network upgrade protocol. A comprehensive proposal is anticipated next week. Shielded Labs is also initiating a project to mathematically verify the entire Orchard circuit from the ground up, and is seeking to hire a Head of Security and a Cryptographer.
Broader Implications: This incident serves as a significant real-world example of the capabilities of Anthropic’s advanced AI model when wielded by a skilled security expert. Hornby utilized Opus 4.8, released publicly on May 28, and within just 24 hours, he identified a critical bug that had persisted through multiple expert evaluations over four years.
And this is merely Opus 4.8; more advanced models like Mythos are imminent. Every cryptocurrency protocol should take note—consider preemptively testing your own system for vulnerabilities with ethical hackers, or risk waiting for malicious actors to exploit them.
The urgency is apparent, as the future of the wider cryptocurrency landscape may be at stake.
🌎 Macro Crypto and Markets
- Most major cryptocurrencies are down; BTC -3% at $61.9k; ETH -7% at $1,655; SOL -6% at $65.70; HYPE -8% at $61.80
- WLD (+9%), DEXE (+8%) and JST (+7%) were among the top gainers
- ZEC plummeted 43% to $306 after the exploit was disclosed, hitting a low of $250
- Oil -1% at $93; Gold decreased by 0.2% to $4,490
- Stock futures show mixed results with the DOW in the green while Nasdaq falls by 1%
- Crypto longs experienced $830M in liquidations in the last 24 hours, including $336M in BTC longs, $277M in ETH, and $117M in ZEC longs
- Coinbase and Better Home & Finance facilitated the first Bitcoin mortgage backed by Fannie Mae, completed by a couple in Ann Arbor who used Bitcoin as collateral to buy their first home without incurring a taxable sale
- Rep. Bryan Steil (R-WI) revealed intentions to include prediction market regulations in the House’s stock ban bill, prohibiting Congress members from betting on elections and public policy on platforms like Kalshi and Polymarket
- Google DeepMind CEO Demis Hassabis stated that humanity stands at the “foothills of the singularity” and forecasts AGI will arrive around 2030, potentially as soon as 2029
- The DOJ’s “Disruption Week” effort led to the freezing of over $3.8 million in stolen cryptocurrency with assistance from Coinbase, SpaceX, Meta, Apple, Google, and Microsoft
- A rapidly expanding gray market for peptides has emerged as one of cryptocurrency’s most lucrative markets, processing over $100 million annually, primarily through Bitcoin and stablecoin transactions
Corporate Treasuries & ETFs
- Bitcoin ETFs recorded $3M in net inflows on Thursday, marking the first positive day since May 14; ETH ETFs saw $19M in inflows
- The HYPE ETFs experienced $12M in net inflows on Thursday
Meme Coin Tracker
- Meme coins declined once again; DOGE -7%, SHIB -7%, PEPE -8%, PENGU -7%, TRUMP -9%, BONK -9%, SPX -11%, FARTCOIN -15%
- SV151 (+800%), Hunter (+200%) and LOA (+60%) were the top gainers on Solana
- Base movers included chainspin (+200x), SERV (+30%) and Pitch (+30%)
📈 Myriad Market of the Day
💰 Token, Airdrop & Protocol Tracker
- Pump Fun launched Pump.fun GO, a global bounty marketplace that allows anyone to create and fund tasks for completion by individuals worldwide
🚚 NFT Developments
- NFT leaders remained mostly stable; Punks steady at 30.8 ETH, BAYC stable at 7.78 ETH, Pudgy up 1% at 4.14 ETH; Hypurr down 9% at 259 HYPE
- VeeFriends (+27%) and Fidenzas (+15%) led the notable top movers