Zcash was rumored to have stopped working

Zcash became the subject of a brief market scare after block explorers appeared to show that the privacy-focused blockchain had stopped producing blocks for several hours.

By the time developers and infrastructure providers pushed back on the claim, the market had already moved in the opposite direction. ZEC was recently trading near $620, up about 10% over the session, while Bitcoin and Ethereum dropped more than 4%, according to CryptoSlate’s data.

The rally turned Zcash into a rare winner amid a broader crypto sell-off tied to renewed geopolitical stress, weaker digital-asset sentiment, and forced liquidations of leveraged positions.

The episode also gave traders a clearer test of what had initially looked like a damaging technical crisis: Zcash did not go offline, but part of its privacy system was deliberately shut down to carry out “the most ambitious network upgrade in Zcash’s history.”

Zcash’s outage rumor masked a narrower problem

The confusion started after Zcash completed an emergency network upgrade to restore Orchard, the shielded pool that underpins the network’s most advanced privacy transactions.

Some block explorers appeared to be stale after the upgrade, giving the impression that the blockchain had stopped.

Infrastructure operators later said those explorers were catching up or resyncing after their nodes upgraded, while miners continued to produce blocks, and transactions continued to be confirmed.

ZODL founder Josh Swihart wrote on X:

“Zcash was never down. Many block explorers have been using unpatched nodes. Happens with every network update.”

That distinction mattered. Zcash was not dealing with a total chain halt. Instead, developers had temporarily disabled Orchard transactions through an emergency soft fork while they prepared a permanent fix for a soundness vulnerability in the Orchard zero-knowledge proof circuit.

The Zcash Foundation said the vulnerability was discovered May 29 by independent security researcher Taylor Hornby, who was conducting protocol security research for Shielded Labs.

ZODL engineers confirmed the report within hours and began preparing a confidential response with miners, exchanges, infrastructure providers, and other network participants.

The first stage of the response was activated at block height 3,363,426 and rejected Orchard-containing transactions and blocks.

The second stage came with the NU6.2 hard fork, which activated at block height 3,364,600 early Wednesday and re-enabled Orchard using a corrected circuit.

The Foundation urged node operators to upgrade to Zebra 5.0.0, the software release that follows the new network rules.

Why Orchard became the center of the story

Orchard is not a peripheral part of Zcash. It is the network’s newest shielded pool and was introduced with the NU5 upgrade in 2022.

Unlike earlier Zcash privacy pools, Orchard uses Halo 2 and does not require a trusted setup, a long-running concern in the design of privacy-preserving cryptocurrencies. The Zcash Foundation described Orchard as the centerpiece of the network’s privacy architecture.

The bug affected the soundness of the Orchard circuit. In plain terms, soundness is the rule that a system should accept only valid transactions and valid state changes. A soundness flaw can allow a system to accept something it should reject.

In this case, the Foundation said successful exploitation could have allowed double-spending inside Orchard. That would have been serious for the shielded pool’s accounting, even though the issue did not allow an attacker to inflate Zcash’s total supply.

That limit is important. Zcash’s “turnstile” mechanism tracks how value moves among its pools, including Sprout, Sapling, Orchard, transparent addresses, and lockbox balances.

The Foundation said those checks confirmed the 21 million ZEC supply cap remained intact, with no evidence of unauthorized value creation.