Getty Images

Zcash nosedives after counterfeit vulnerability revealed

The privacy-focused cryptocurrency has dropped more than 40% in the last 24 hours, shedding $3.8 billion in market capitalization.

Sage D. Young

Zcash, the native cryptocurrency for the privacy-focused blockchain bearing the same name, has cratered after Shielded Labs, an independent organization supporting the network, disclosed a counterfeit vulnerability that has since been patched after going undetected by world’s best cryptographers since 2022.

The token has plummeted more than 40% in the past 24 hours, shedding $3.8 billion in market capitalization.

The vulnerability was in Orchard, one of the network’s shielded pools that preserves privacy by using zero-knowledge cryptography to conceal transaction details and token ownership.

“The vulnerability could have been exploited to undetectably create an unlimited amount of counterfeit ZEC within Orchard,” according to a Thursday report from Shielded Labs. “Because of the privacy properties of Orchard, there is no way to cryptographically prove whether the vulnerability was exploited before it was remediated.”

Even though the vulnerability was patched in an emergency fix on Monday, the disclosure on Thursday was enough to spook a number of holders into completely reducing their exposure. Arthur Hayes, cofounder of crypto exchange BitMex and CIO of Maelstrom, dumped his entire bag of Zcash, saying on X, “The privacy from AI, govt, big tech narrative demands perfection not improbability.”

Meanwhile, Taylor Hornby, the security researcher who identified the vulnerability, had used Anthropic’s Opus 4.8 model to make the discovery.

The announcement from Shielded Labs comes as the decentralized finance ecosystem is still recovering from several substantial attacks in April, namely KelpDAO’s $290 million exploit and Drift’s $270 million hack. That month, Anthropic also said its Claude Mythos Preview AI model had found thousands of high-severity vulnerabilities “in every major operating system,” showing how artificial intelligence can outperform nearly all human experts at exploiting software vulnerabilities.

“A network upgrade can be deployed to protect users and prove the integrity of the Zcash supply,” the report stated. Shielded Labs, alongside different Zcash developers, are currently evaluating a network upgrade that would enable the public to verify the token’s supply and confirm counterfeit coins in the Orchard pool do not exist.

Zcash is trading just above the $300 level, down from $600 earlier this week. In the last 24 hours, the cryptocurrency saw $120 million in liquidations, with over 61% coming from long positions, data from CoinGlass shows.

$62B

Yaël Bizouati-Kennedy2h

Bitcoin digital asset treasuries (DATs) have taken a big hit amid bitcoin’s tumble, shedding $62 billion in value since the asset’s October 6 all-time high, Artemis data shows, with their fully diluted market cap dropping to $72 billion from $134 billion in early October.

Meanwhile, bitcoin, which has fallen below $62,000 on Friday morning, is down 50% from its all-time high. DAT pioneer Strategy’s market cap stood at $102.2 billion on October 6, according to Macro Trends, and is now down to $45.6 billion, a 55% decline. Strategy has been in hot water since it sold 32 bitcoin earlier this week, and because its digital credit instrument, STRC, has been trading below its par value. Shares of Strategy are down 17% in the past week.

Sage D. Young22h

“Sentiment for crypto is firmly in the gutter” as sector sinks, with tokens hitting multiyear lows

On Thursday, altcoins swept lower as bitcoin weakened. The tokens with the biggest losses in the last 24 hours are NEAR, ethena, and Zcash, each declining double digits in the period.

Other tokens have dropped to lows not seen in over a year in the past 24 hours:

Ethereum dropped 4.4% to under $1,780, a level not seen since April 2025.
XRP declined 4.5% to an 18-month low last hit in November 2024.
Solana decreased 6% to trade below the $70 mark, its lowest price since December 2023.
Dogecoin slid below $0.09, a 27-month low last seen in February 2024.

“Sentiment for crypto is firmly in the gutter as fears surrounding BTC/STRC and its potential overflow compound and overshadow anything that can be read as positive news (e.g. CLARITY movements),” according to Sean Dawson, head of research at crypto options platform Derive.xyz.

“[Altcoins] are high beta plays to BTC and are typically sold heavily in a downturn. Simply put, I’d be even more bearish on alts,” Dawson told Sherwood News.

“Further, liquidity has been drained into this year’s ‘superhot’ narrative of AI/data centers. In other words, there are just better, more exciting opportunities elsewhere,” Dawson added.

One cryptocurrency that has bucked the downtrend has been worldcoin, the native token for World, the digital identity project backed by OpenAI CEO Sam Altman. While the broader crypto market has been pushing lower, WLD has jumped nearly 5% in the last 24 hours and 90% in the past seven days, data from CoinGecko shows.

Yaël Bizouati-Kennedy

23h

Bitcoin nears February lows amid $1.4 billion exiting its ETFs

“This week has been painful in crypto. There is really no other way of putting it.”

Bitcoin Medals Manufactured At Sakamoto Metal

Yaël Bizouati-Kennedy

6/3/26

Bitcoin tumbles toward $65,000 as crypto may be “forced to go through a painful metamorphosis”

The AI trade is “sucking all the oxygen out of the room,” one analyst wrote.

ITALY-BITCOIN-COMPRO-EURO-CRYPTOCURRENCY

Sage D. Young6/2/26

Solana falls to a more than 3-month low

The price of solana has been struggling, dipping below $76 briefly on Tuesday, a level not seen since February.

Despite the underlying asset suffering, solana ETFs saw $115 million of inflows in May, the highest monthly figure in 2026, data from SoSoValue shows. The investment vehicles have brought in a total of $1.1 billion since their inception last year and have yet to record a monthly outflow.

However, positive ETF flows haven’t swayed traders, who are increasingly negative: prediction market-implied odds of solana dropping under $60 in the year stand at 60%, an increase from 45% three weeks ago.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

"ETF flows for Solana have been positive but relatively small, so they currently only have a marginal effect on the overall price discovery for SOL," according to Carlos Guzman, research analyst at crypto trading firm GSR.

"Solana has been caught up in the broader crypto market weakness, where, outside of a few sectors that have attracted interest of late, including perpetual exchanges, privacy, and AI, most crypto token performance has been sluggish," Guzman told Sherwood News. "The meme coin narrative that drove interest in SOL in late 2024 and early 2025 has largely subsided, so the token has found itself outside of the current zeitgeist."

Meanwhile, former presidential candidate Andrew Yang’s Noble Mobile announced on Tuesday that it acquired Helium Mobile, a wireless carrier that runs on the solana blockchain. The two companies both declined to disclose the deal’s financial details, according to a report from Fortune.

(Event contracts are offered through Robinhood Derivatives, LLC — probabilities referenced or sourced from KalshiEx LLC or ForecastEx LLC.)

Zcash nosedives after counterfeit vulnerability revealed

More Crypto

“Sentiment for crypto is firmly in the gutter” as sector sinks, with tokens hitting multiyear lows

Solana falls to a more than 3-month low

Latest Stories