Could Hackers Have Secretly Minted Unlimited ZEC? Dragonfly Weighs In

The debate over Zcash’s recently patched Orchard Pool vulnerability is far from settled. While some investors fear the worst, Dragonfly partner Haseeb Qureshi says the market may be overstating the immediate risks. He also confirmed that Dragonfly continues to hold ZEC despite the controversy.

The vulnerability remained undiscovered for years before developers patched it. In theory, an attacker could have used it to create unlimited counterfeit shielded ZEC. However, Qureshi argues that any damage would likely have stayed within the shielded pool rather than spreading across the broader ZEC market.

Why Qureshi Thinks the Threat Is Limited

Qureshi explained that anyone creating counterfeit shielded ZEC would eventually need to convert those coins into transparent ZEC before selling them on major exchanges.

Because transparent ZEC remains fully auditable, the network can easily detect attempts to move excessive amounts into the visible supply. For that reason, Qureshi believes most traders and exchange users faced little direct risk. Shielded pool users would have carried the bulk of the exposure.

He also pointed to recent network data. Over the last 48 hours, the shielded pool’s share of supply fell from 31% to 30%. Qureshi says that a modest decline does not suggest panic among privacy-focused users.

Not Everyone Agrees

However, Zcash creator Wei Dai says the situation may be more complicated.

Responding to claims that a major exploit would have resulted in obvious withdrawals from the Orchard Pool, Dai argued that a sophisticated attacker would likely avoid draining the pool entirely. Instead, he suggested the Orchard Pool itself could serve as a laundering mechanism. A hacker could potentially keep counterfeit ZEC inside the shielded ecosystem and distribute it gradually through private transactions while the pool remained active.

Dai also proposed another scenario. An attacker who discovered the bug early could have quietly opened a large short position against ZEC before the vulnerability became public. Because ZEC has liquid perpetual futures markets, such a strategy could generate significant profits while leaving few obvious traces.

Dragonfly Remains Bullish

Despite the ongoing debate, Qureshi remains confident in Zcash’s path forward.

The Zcash team is planning a new turnstile mechanism and a fresh shielded pool that will effectively verify whether the existing pool was inflated. Qureshi compared it to taking attendance after a field trip to ensure no extra coins slipped into circulation.

He also disclosed that Dragonfly still holds ZEC, while he personally remains invested in ZODL, signaling continued confidence even as the industry wrestles with one of the biggest privacy-coin security debates in years.