Arthur Hayes, co-founder of BitMEX, liquidated his entire holdings of Zcash, Hyperliquid, and NEAR Protocol on June 5, 2026. The move came after a vulnerability in Zcash's Orchard shielded pool triggered a price collapse — ZEC lost more than 45% of its value — and raised questions about whether counterfeit tokens were quietly minted inside the privacy system.
Why the Orchard vulnerability mattered
The flaw, which has since been patched, existed in Zcash's shielded transaction layer. Because shielded transfers are encrypted by design, developers cannot retroactively check whether the bug was exploited before the fix. That uncertainty spooked the market and, according to Hayes, broke the core thesis behind his investment.
Hayes had previously described Zcash, Hyperliquid, and NEAR as his 'Holy Trinity' of crypto bets. After the vulnerability emerged, he said that thesis no longer held. The key issue, he wrote on the day of the liquidation, was unresolved uncertainty about potential past minting of counterfeit ZEC.
The price reaction was violent. ZEC's market price dropped more than 45% at the peak of the panic, wiping out millions in value before the patch was publicly acknowledged.
A broader portfolio shift
The liquidations were not limited to Zcash. Hayes also exited his positions in Hyperliquid (HYPE) and NEAR Protocol (NEAR) on the same day. There is no direct technical link between the Zcash vulnerability and those tokens. The simultaneous exit suggests Hayes was rebalancing his portfolio in a single, sweeping move — likely a response to the breakdown of his original investment rationale.
Neither the Hyperliquid team nor the NEAR Foundation has commented on the transactions. It's not clear whether Hayes sold those positions for the same reasons or simply decided to cut his losses on the entire basket.
The Zcash development team has already deployed the patch for the Orchard shielded pool. But the privacy guarantees that make the system attractive to users also make it impossible to tell if anyone exploited the bug before it was fixed. That open question hangs over the token's recovery.
Hayes's exit may add to the selling pressure, but his departure from the 'Holy Trinity' thesis is more symbolic than market-moving. Institutional holders and privacy-focused investors will watch for any further disclosures about the vulnerability's potential impact. For now, the only thing that's certain is that the flaw is closed — the question of whether it was ever used remains unanswered.
