Zcash Orchard Pool Counterfeiting Bug
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anchored·3jQbpU…TzxMSummary
On May 29, 2026, security engineer Taylor Hornby, working for Shielded Labs and using Anthropic's Claude Opus 4.8 model, found a critical soundness flaw in the zero-knowledge proof circuit of Zcash's Orchard shielded pool. The flaw had been present since the pool launched in May 2022 and could have allowed unlimited, undetectable counterfeit ZEC to be created inside the pool. Zcash developers disabled Orchard with an emergency soft fork on June 2 and deployed a corrected circuit in the NU6.2 hard fork on June 3. No exploitation has been found, but because Orchard hides transaction details, it cannot be proven cryptographically that the flaw was never used. After public disclosure on June 5, 2026, ZEC fell about 38% in 24 hours and about 50% over 48 hours.
Connected Entities
7 entities · 60 linked investigations- Zcash Orchard Pool Counterfeiting Bug→mentioned with→BitMEX(60%)
- Zcash Orchard Pool Counterfeiting Bug→mentioned with→Zcash(70%)
- Zcash Orchard Pool Counterfeiting Vulnerability 2026→mentioned with→BitMEX(65%)
- Zcash Orchard Counterfeit Vulnerability→mentioned with→BitMEX(60%)
- Zcash Orchard Counterfeit Vulnerability→mentioned with→Ethereum(60%)
- Zcash Orchard Counterfeit Vulnerability→mentioned with→Zcash(70%)
- Zcash Orchard Pool Counterfeiting Vulnerability→mentioned with→Zcash(70%)
- Zcash Orchard Pool Counterfeiting Vulnerability→mentioned with→BitMEX(70%)
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Timeline(20 events)
May 2022
The Orchard shielded pool activates on mainnet through the NU5 upgrade, introducing the Halo 2 proving system. The soundness flaw in the halo2_gadgets scalar multiplication gadget is present from launch.
Zcash Foundation / Shielded Labs / CoinDeskJanuary 2026
The SEC closes its investigation into the Zcash Foundation without enforcement action.
Crypto TimesApril 2026
Shielded Labs engages Taylor Hornby as an independent security engineer for a targeted protocol audit of Zcash.
CoinDesk / Unchained CryptoMay 2026
On May 28, Anthropic publicly releases the Claude Opus 4.8 model.
BeInCrypto / Unchained CryptoMay 2026
On May 29, Taylor Hornby finds the Orchard circuit soundness flaw using Claude Opus 4.8 and a custom AI auditing harness. He builds a working exploit that generates unlimited counterfeit ZEC in a local regtest environment and discloses it to ZODL engineers that evening.
The Block / CoinDesk / Crypto TimesMay 2026
On May 30, ZODL engineers Daira-Emma Hopwood, Kris Nuttycombe and Jack Grigg confirm the vulnerability, and ZODL executive Josh Swihart joins a secure coordination call. Emergency response planning begins.
Crypto TimesMay 2026
On May 31, private coordination with miners, exchanges and node operators begins.
Zcash FoundationJune 2026
The emergency soft fork is prepared in Zebra 4.5.3. Activation is delayed because miners have too little time to deploy it, and coordination with the mining pools ViaBTC and Foundry continues.
Crypto TimesJune 2026
The emergency soft fork activates at mainnet block height 3,363,426 (about 02:00 UTC on June 2 per the Zcash Foundation; 22:30 EDT on June 1 per another account), disabling all Orchard-containing transactions. ZODL releases zcashd v6.12.5.
Zcash Foundation / Crypto TimesJune 2026
A 25-block fork (heights 3,363,431-3,363,455) with 37 orphaned blocks occurs as nodes run outdated software, resolving in favor of the patched chain. Accounts place it at the June 2 soft fork or the June 3 NU6.2 switchover.
Crypto Times / Crypto EconomyJune 2026
On June 3, the NU6.2 hard fork activates at block height 3,364,600 (00:05 EDT) via Zebra 5.0.0, re-enabling Orchard with the corrected circuit and a new consensus rule rejecting non-canonical proof sizes. Testnet activates at block 4,052,000. ZEC rallies from about $544 to about $624.
Zcash Foundation / CoinTelegraphJune 2026
On June 4, ZEC trades at a local high of about $624-$635, depending on the source.
Decrypt / BitMEX BlogJune 2026
On June 5, Shielded Labs publishes its public disclosure (written by Jason McGee). ZEC falls about 38% in 24 hours and about 50% over 48 hours, to a low of about $309, and trading volume drops about 57%.
CoinDesk / Decrypt / CryptoBriefingJune 2026
On June 5, Arthur Hayes publicly says he has liquidated his entire ZEC position because it cannot be ruled out cryptographically that the flaw was exploited.
CoinDeskJune 2026
On June 5, Shielded Labs proposes a network upgrade creating a new shielded pool with turnstile accounting on all existing Orchard coins.
The DefiantJune 2026
On June 8, developers propose the Ironwood network upgrade, targeted for late July 2026, and ZEC rebounds about 45% from its post-disclosure low. A detailed post-mortem of the 50-hour response is published the same day.
CoinDesk / Crypto TimesJune 2026
On June 14, Bloomberg publishes analysis describing the incident as showing the 'scale of AI-hacking threat' to cryptographic systems.
BloombergJune 2026
On June 15, Zcash founder Zooko Wilcox explains how Ironwood's turnstiles will work as a live supply audit during migration, and Shielded Labs updates its original disclosure post.
Crypto Times / Shielded LabsDecision Log
- slot 445504907 · hash HU35w6a38R7LAjE19ZN6EtxNRv3wfwCxSZJCma1CXf9B
- slot 425419440 · hash 2uN9cJzdf6PauZMsnBXjABRZNsTsSL16rSNqQkAa6Yy3
- slot 425419437 · hash 3Zk6LvQ9qNpYahjFkdCUsHjTpBg1hM9TDPDstEX46PnQ
- slot 425403478 · hash 4mbaaKWyBdxctCVCcWng5YtzztRtk1UwzBnRvJrtXFU1
This investigation is cryptographically anchored to the Solana blockchain (4 decisions). 37 of 39 cited source URLs have an Internet Archive snapshot.
model: claude-code-merge-writer
generated: 6/9/2026, 8:49:47 PM
last updated: 10/2/2026, 5:29:19 AM
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