Orchard of Zcash [ZEC] has just been found to have a vulnerability that has existed for 4 years, while earlier transaction data shows unusual activity.
Allium Labs reports that the trading volume for ZEC increased significantly before the error was announced, raising suspicions that some positions may have been opened early. However, the available data is not yet sufficient to conclude whether there were trades based on inside information or whether the vulnerability was exploited.
Source: Allium Research
ZEC trading volume surges before the bug is detected
ZEC recorded an unusual trading burst on May 26, when volume jumped to 12–13 times the average level. Then, three days later on May 29, researchers only discovered the Orchard bug.
This timeframe led the market to question whether some traders noticed risk signals earlier than the rest. However, the timeline only shows a notable coincidence, not proof of the cause.
During that period, the ZEC price fell from around $660 to $530, indicating that selling pressure was rising. By June 2, the development team disabled Orchard and released a patch on June 3.
Large short positions appeared before the bug was announced
Allium Labs showed the most profitable positions opened on May 25 and May 26, i.e., before the bug was publicly discovered. The largest short position was worth $34.5 million and generated about $998,000 in profit.
Another short position worth $17.7 million also recorded about $724,000 in profit. These figures make the market suspect that some traders had bet correctly before information about the bug spread.
However, futures data is not enough to conclude that there was trading based on insider information. Shorts always come with longs, so the profit of one side does not automatically mean that side knew about the incident in advance.
Source: Allium Research
ZEC drops sharply as market confidence weakens
On June 5, ZEC fell 64% from $685 to $247, while hourly trading volume reached $560 million. This development shows the market reacted strongly to risks related to Orchard.
A large long position worth $91.5 million then lost $6.97 million, showing that not every bet went in the right direction. This also highlights that ZEC price fluctuations do not move one-sidedly for any trading group.
Zcash still uses a privacy model that makes it difficult to verify whether the vulnerability was ever exploited. Therefore, the market must primarily price based on probability rather than certain evidence.
Summary
The Orchard vulnerability of Zcash and unusual transactions before detection raised many questions, but there is still not enough evidence to conclude exploitation or trading based on early information. Market confidence is therefore still under pressure after the patch was released.
Source: https://tintucbitcoin.com/lo-hong-orchard-zcash-lo-giao-dich-truoc-cong-bo/
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