265,000 ZEC Withdrawn From Exchange; AI Discovers Critical Zcash Counterfeit-Minting Bug
An entity withdrew 265,000 ZEC tokens (approximately $107 million) from an exchange within two days. Separately, an AI system identified a critical bug in Zcash that could have enabled unlimited counterfeit minting, threatening the integrity of the protocol.
Zcash Bug: the flaw that shielded pools couldn't hide
A soundness bug hiding in Zcash's Orchard shielded pool since 2022 meant someone could theoretically forge zero-knowledge proofs and mint unlimited ZEC from nothing — and the network would have accepted every fake transaction as genuine.
A security engineer found it with $200 of AI compute. Four years of silent exposure, caught by a tool that barely existed when the bug was introduced.
Here's the uncomfortable cut: the very privacy architecture that makes Zcash meaningful is also what makes a bug like this so hard to catch. Shielded pools hide balances by design. That same opacity means counterfeit supply could have grown invisibly. You can't have one without the other.
Developers patched it in five days, which is genuinely impressive. But "no evidence of exploitation" is a much weaker statement when the whole point of the system is that transactions are unobservable. The contrarian case for privacy coins rests on them actually working. This time they got lucky.
Story timeline · 8 days
- Jun 19, 20265BTC OG Insider Whale Closes ZEC and UNI Longs; Retains $80M BTC Long
Garrett Jin closed ZEC position with $417K profit and UNI position at $314K loss, while maintaining an $80M BTC long.
- Jun 19, 20267Zcash Crisis Highlights Crypto Auditing Blindspot
Forbes published analysis framing the Zcash situation as an industry-wide auditing blindspot beyond the prior price rally coverage.
- Jun 16, 20264Zcash Posts 14–25% Rally; ZEC Tops $470
ZEC continued its rally, topping $470 with the price prediction analysis now noting a 14% move and questioning whether $520 is achievable.
- Jun 15, 20267Zcash Surges 25%; AI Security Audit Finds No Serious Bugs; ZEC Price Tops $470
ZEC surged over 20-25% with market cap reaching $8.26B and price topping $470, driven partly by the clean Anthropic AI security audit result and macro catalyst.
- Jun 14, 20266Zcash Security Audit by Anthropic and Mythos Finds No Critical or Serious Vulnerabilities
Coinbase-linked Mythos AI (Anthropic) audit confirmed no serious protocol bugs in Zcash; Zcash founder confirmed result.
- Jun 13, 20267Zcash Joint Anthropic-Mythos Security Audit Finds No Critical Vulnerabilities
Zcash's joint Anthropic and Mythos security audit completed with no serious vulnerabilities found, following prior AI discovery of a critical counterfeit-minting bug.
- Jun 12, 20264Zcash ZCAP Governance Poll Opens for ZCG Election
A ZCAP governance poll for the Zcash Community Grants election has opened, marking the next procedural step in Zcash governance following the prior critical bug disclosure.
- Jun 11, 20268· this story265,000 ZEC Withdrawn From Exchange; AI Discovers Critical Zcash Counterfeit-Minting Bug