Analysts at Allium identified five significant profitable short positions on ZEC at Hyperliquid totaling over $72 million, opened on May 25-26 — just days before the discovery of a vulnerability in the Orchard pool.
The critical bug was identified on May 29, but the information was publicly disclosed only on June 5. Amid discussions of the incident, the price of ZEC plummeted from $685 to a local low of around $250.
According to Allium, trading volume for the coin on Hyperliquid surged on May 26. On that day, peak hourly turnover reached $283 million — approximately 12-13 times the usual level.
Additional pressure was created by former BitMEX CEO Arthur Hayes, who announced on July 4 that he had sold his entire ZEC position.
The most active hour occurred on June 5: during this period, Zcash trading volume on Hyperliquid exceeded $560 million — at that time, the coin’s price was near its bottom.
The vulnerability in Orchard, present in the contract since its launch in May 2022, allowed for the issuance of unlimited ZEC. Due to the private nature of Zcash transactions, no one, including developers, can prove that the bug was not exploited in practice.
The blockchain team addressed the issue through a soft fork and hard fork.
Allium emphasized that the timing coincidence does not prove early access to information. Wallet data shows trading behavior but does not explain motives. The report covers only Hyperliquid futures and does not include spot markets on Coinbase, Binance, and other centralized exchanges.
As reported, the Zcash team agreed on consensus changes for the Ironwood update. The upgrade is set to launch a new shielded pool and limit the supply of ZEC.
