Arthur Hayes says Maelstrom has sold its entire Zcash position after new disclosures about the Orchard Pool vulnerability made the risks to ZEC’s monetary integrity more clear. This move effectively ends his recent “Holy Trinity” trade involving ZEC, NEAR, and HYPE, while leaving Worldcoin as the AI-related bet the fund still holds. “The Holy Trinity is dead,” Hayes wrote on X. “Sadly, due to the Orchard Pool exploit, I had to dump our entire ZEC bag.”
Why Is Hayes Dumping Zcash Now?
The post followed a detailed statement from Zooko Wilcox, Jason McGee, and Taylor Hornby, who described the issue as “The Orchard Counterfeiting Vulnerability.” According to their summary, Hornby found a critical vulnerability in Zcash’s Orchard pool on May 29 and reported it to Zcash Open Development Lab, which coordinated an emergency response that was completed by June 2. The key point was stark: the vulnerability “could have been exploited to undetectably create an unlimited amount of counterfeit ZEC within Orchard.”
That disclosure changed how the market viewed the situation. Earlier messages from the ecosystem had stressed that the vulnerability had been fixed, that there was no evidence it had been exploited, and that user funds were safe. But Wilcox, McGee, and Hornby added an important caveat: because of Orchard’s privacy features, there is no way to cryptographically prove whether the vulnerability was exploited while it existed. This distinction is at the heart of Hayes’ decision to exit.
“While I think it’s extremely unlikely that any minting occurred, it cannot be formally cryptographically proven impossible,” Hayes wrote. “The privacy from AI, government, and big tech narrative demands perfection, not improbability. I read about the exploit yesterday and didn’t realize how much it conflicted with my mental framework.”
Josh Swihart, founder and CEO of Zcash Open Development Lab, offered his own explanation in a post titled “Never Again.” He described the Orchard bug as a failure in one of the system’s rules: the rule was written loosely enough that it could accept false information and still pass. In other words, the problem wasn’t a privacy leak but a soundness failure in the proof system—the kind of issue that can undermine confidence in whether invalid value creation was possible inside a shielded pool.
The emergency fix required coordinated network action rather than a simple wallet or application patch. ZODL and the broader Zcash ecosystem moved to temporarily disable Orchard actions and then restore them with a corrected circuit. The fix may have closed the vulnerability, but for a privacy asset, the reputational damage came from the lingering uncertainty: no evidence of counterfeiting is not the same as cryptographic proof that counterfeiting never happened.
Hayes said the roughly 30% selloff in ZEC forced him to rethink the position. “The 30% drop made me reconsider, and I had to take profit on the entire position,” he wrote. His reasoning was not that exploitation had occurred, but that the privacy thesis he had attached to ZEC required a higher standard than probabilistic reassurance.
The sale marks a rapid reversal from Hayes’ May 22 “Holy Trinity” call, when he grouped HYPE, ZEC, and NEAR as a three-token basket. “When you’re in a position, trading is easy—sit back and watch the number go up,” he wrote at the time, naming “HYPE, ZEC, NEAR the holy trinity.” HYPE represented the on-chain derivatives and protocol revenue trade, NEAR the AI and chain-abstraction angle, and ZEC the privacy leg. A day before the ZEC sale, Hayes had already said he dumped his entire HYPE and NEAR positions, citing higher energy prices, upcoming major AI IPOs, and political risk around artificial intelligence as reasons for taking profit.
Still, Hayes didn’t close the door on Zcash. “We will consistently re-evaluate,” he said.He wrote, “We’ll rethink our strategy if my assumptions turn out to be wrong, and we’ll buy back in, hopefully at lower prices. Privacy is invaluable, and I have no problem admitting I was wrong and buying back at much higher prices.” For now, Worldcoin remains the only public sign of his shift toward AI-related investments. “We still hold WLD and are excited for Lord Elon to boost our holdings,” Hayes added. This follows his recent public call for a WLD bull market, linking the move to renewed speculation around AI assets and an OpenAI IPO. At the time of writing, ZEC had dropped more than 45% in 24 hours. Featured image created with DALL.E, chart from TradingView.com.
Frequently Asked Questions
Here is a list of FAQs about Arthur Hayes selling his Zcash holdings while maintaining his WLD bet
General Background Questions
Q Who is Arthur Hayes
A Hes the cofounder of the BitMEX crypto exchange Hes a wellknown trader and commentator in the crypto space
Q Did Arthur Hayes really sell all his Zcash
A Yes According to onchain data and public statements from his investment fund he has fully exited his Zcash position
Q Is Arthur Hayes still holding Worldcoin
A Yes He has stated publicly that he is maintaining his bet on Worldcoin even after selling Zcash
Why the Move
Q Why did he sell Zcash
A He cited a shift in focus He believes the narrative around privacy coins like Zcash is fading compared to the potential of identityfocused projects like Worldcoin
Q Why is he still betting on Worldcoin
A He thinks Worldcoins proof of personhood solves a major problem for AIdriven economies verifying that a user is a real human not a bot He sees this as a bigger longterm opportunity
Q Does this mean Zcash is a bad investment now
A Not necessarily for everyone It just means Hayes personally prefers the riskreward profile of WLD over ZEC right now Zcash still has a community and use case for privacy
Technical Practical Questions
Q How did people find out he sold Zcash
A Through onchain analysis Wallets linked to his fund moved large amounts of ZEC to exchanges signaling a sale He also confirmed it in interviews
Q Is he shorting Zcash or just selling
A He simply sold his longterm holdings He is not publicly shorting Zcash
Q Is he buying more Worldcoin now
A He hasnt announced a specific new purchase He is simply holding his existing position meaning he hasnt sold it
Advanced Strategic Questions
Q What is the thesis behind his WLD bet