In early June 2026, the Zcash (ZEC) network experienced a serious incident that caused panic among holders and led to a sharp price drop. We have prepared a brief breakdown so you understand what happened and why your funds are safe when using UnionXbit.
What happened?
Between May 29 and June 2, 2026, dramatic events unfolded in the Zcash network:
Critical vulnerability discovered (May 29).
Independent researcher Taylor Hornby, working on behalf of Shielded Labs, discovered a critical vulnerability in Orchard — the newest privacy pool in Zcash. Using AI-powered tools (Anthropic’s Claude Opus 4.8 model), he was able to create an unlimited number of counterfeit ZEC in a test environment that were indistinguishable from genuine coins.
The vlnerability had existed since Orchard’s activation in May 2022 — approximately four years.
Emergency updаte (June 1–2).
Zcash developers (Zcash Open Development Lab, Zcash Foundation, Electric Coin Company) coordinated an emergency response. They first disabled Orchard via a soft fork, then released a hard fork (NU6.2) that fixed the zero-knowledge proof scheme itself.
Block production halt (June 3).
After the updаte, the Zcash network stopped producing blocks for more than four hours. Transactions stalled, and deposits on exchanges (Binance, Kraken) were temporarily not confirmed.
The halt was not caused by the updates themselves, but by technical issues at major mining pools (Foundry, ViaBTC, F2Pool, Antpool) that failed to synchronize in time.
Was there a threat to user funds?
Yes, theoretically, it was very serious. The vulnerability allowed an unlimited number of counterfeit, indistinguishable ZEC to be created within the Orchard pool. However:
No evidence of real exploitation. Developers and independent auditors found no evidence that anyone had actually exploited the vulnerability before it was fixed.
The total ZEC supply remains unchanged. Zcash Foundation and Shielded Labs confirmed that the issuance was not compromised and all user funds remained safe.
The issue was fixed quickly. The vulnerability was patched within days of discovery.
The main problem now is uncertainty. Due to Orchard’s privacy features, there is currently no cryptographic way to irrefutably prove that counterfeiting did not occur. Developers are working on solutions — for example, proposing to create a second officially verified Orchard pool.
How did the market react?
The price of ZEC fell 26–36% within 24 hours after the disclosure. Well-known trader Arthur Hayes (former CEO of BitMEX) closed his ZEC position, stating that for the privacy sector, “probably safe” is not good enough.
What does this mean for you as a UnionXbit client?
- Your funds are safe. We do not exchange coins that may be questionable. If the Zcash network is unstable, we temporarily suspend operations until we are fully confident in its security.
- We are monitoring the situation. As soon as the network fully stabilizes and developers provide final guarantees, we will resume ZEC exchange in normal mode.
- We are always on your side. Our primary goal is to protect your funds from risks, even if it means temporary inconvenience. Security comes first.
Conclusion:
The Zcash incident is a serious blow to its reputation, but not a death sentence. Developers reacted quickly, and the vulnerability has been patched. The incident highlighted how fragile privacy blockchain technology can be and underscored the importance of formal code verification.
We will continue to monitor developments. If you have questions about exchanging ZEC or other coins, please contact our support. We are always here to help.
