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Allium and Arkham flag unusual Zcash activity after Orchard bug disclosure

Allium and Arkham flag unusual Zcash activity after Orchard bug disclosure

Trading volume and $72 million in short positions rose before disclosure of a Zcash Orchard vulnerability, and Arkham later said an address withdrew about 1% of the shielded pool.

ZEC

Fact Check
Every element of the claim is corroborated. The CryptoBriefing Allium Labs report confirms five wallets opened ~$72M in shorts on Hyperliquid, realized $3.43M profit, and that Allium flagged the pre-disclosure spike as anomalous/possible early knowledge. The companion CryptoBriefing article and independent outlet Memeburn confirm the four-year (since May 2022) Orchard soundness bug that could enable unlimited counterfeit ZEC minting. Social-media posts quoting @AlliumLabs (via SolanaFloor and CryptomechanicX) repeat the same figures and 'possible early knowledge' framing, and Allium's own account references the pre-disclosure short positions. The only nuance is that 'possible early knowledge' is presented as a flagged suspicion, not a proven conclusion, which matches how the claim is worded.
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Summary

Allium Labs said Zcash trading volume jumped to 12 to 13 times normal on May 26, shortly before disclosure of an Orchard vulnerability that Shielded Labs said could have allowed undetectable, unlimited counterfeit ZEC in a controlled demonstration. Allium said five wallets opened roughly $72 million in short positions and later realized $3.43 million in profit, a pattern it said may indicate early knowledge of the flaw. Separately, Arkham said an unknown address later withdrew about 1% of all ZEC held in the Orchard shielded pool, which it estimated still held about 3.88 million ZEC worth roughly $1.65 billion. Zcash disclosed the flaw on June 5 after security researcher Taylor Hornby identified it on May 29 with help from Anthropic’s Opus 4.8 AI model; Shielded Labs said it believes the exploit was not used on the live network, though Orchard’s privacy design means that cannot be proven definitively.

Terms & Concepts
  • Orchard pool: Zcash’s shielded pool for private transfers, powered by the Orchard circuit.
  • short positions: Bets that an asset's price will fall.
  • turnstile accounting: A method for tracking tokens moving out of a shielded pool so the circulating supply can be checked.