Zcash Orchard disabled, bug fixed; ZEC rises amid sell-off

Reports that Zcash had stopped producing blocks were incorrect. Developers temporarily disabled Orchard shielded transactions to fix a soundness bug in its zero-knowledge proof circuit, activated an emergency soft fork to block Orchard-containing transactions, and then restored Orchard with the NU6.2 hard fork. During the sequence, ZEC rose while Bitcoin and Ether fell.

The vulnerability was discovered May 29 by independent researcher Taylor Hornby during security testing. Zcash engineers and the Zcash Foundation began confidential coordination with miners, exchanges and infrastructure providers on May 31 to prepare a repair and avoid public disclosure before a fix was ready.

To prevent potential exploitation, developers activated a soft fork at block height 3,363,426 that rejected transactions and blocks containing Orchard data. Sapling and transparent transactions continued to process normally while Orchard was paused.

Engineers produced a permanent fix that corrected the Orchard zero-knowledge circuit and updated the verifying key, a consensus-level change. The NU6.2 hard fork activated at block height 3,364,600 and restored Orchard transactions. Node operators were advised to upgrade to Zebra 5.0.0 to follow the new network rules.

Some block explorers showed the chain as stalled because they were running unpatched nodes or were resyncing after the upgrade. Miners continued producing blocks and confirmations continued to clear. ZODL founder Josh Swihart wrote on X: “Zcash was never down. Many block explorers have been using unpatched nodes. Happens with every network update.”

The bug affected soundness in the Orchard circuit, meaning the network could have accepted invalid Orchard transactions. The Foundation said a successful exploit might have allowed double-spends inside Orchard, but checks tied to Zcash’s turnstile mechanism confirmed the 21 million ZEC supply cap remained intact and there was no evidence of unauthorized value creation. The Foundation added that user privacy was not compromised by the issue.

Repairing the flaw required changing the pinned verifying key used to validate Orchard proofs, which is a consensus change that can only be implemented through a fork. For that reason developers first used a soft fork to suspend Orchard while keeping technical details confidential, then deployed the hard fork to install the corrected circuit and resume full functionality.

The sequence of events was compressed. Private outreach began May 31, the soft fork activated in the early hours of June 2 after an initial deployment hiccup, and the NU6.2 hard fork followed early on June 3. The Foundation characterized the work as only the second security-driven protocol upgrade in Zcash’s history since the network launched in 2016.

Markets moved as the repair completed. ZEC traded higher during the session, reaching an intraday peak above $640 and trading around $620 after the upgrade, near a 10% gain for the day. Bitcoin and Ether fell more than 4% during the same session. The broader crypto market was under pressure from renewed geopolitical tensions and liquidations of leveraged positions; traders treated the Orchard issue as contained with no known exploitation.

Orchard is Zcash’s newest shielded pool, introduced with the NU5 upgrade in 2022 and built using Halo 2 without a trusted setup. The rapid coordination to disable, fix and re-enable Orchard involved miners, exchanges and node operators working on tight timelines to restore the network’s privacy functionality.