Monero drops 10% as researcher who found Zcash bug adds XMR to audit queue

Monero fell 10% after Taylor Hornby, who used AI to uncover a critical Zcash counterfeiting bug, said he would add the privacy coin to his audit queue.

"Absolutely! I'll add Monero to my queue of things to audit," Hornby, a security engineer at Shielded Labs, said on X. Hornby was hired by the nonprofit developer in April to find protocol bugs before attackers could exploit them.

The Zcash vulnerability Hornby discovered on May 29 using Anthropic's Claude Opus 4.8 had gone undetected in the Orchard shielded pool since its launch in May 2022. Hornby developed a functional proof-of-concept that could produce unlimited counterfeit ZEC in a controlled environment. Zcash fell 38% in the 24 hours after the disclosure, dropping below $265, as the privacy architecture made it impossible to cryptographically confirm whether exploitation had occurred.

The announcement places Monero under the same level of AI-assisted scrutiny that exposed a four-year-old bug in its largest competitor. Hornby plans to apply for a Zcash coinholder grant to fund further audits of privacy-focused cryptocurrencies. Monero, which hides transaction details by default, trades under the ticker XMR and is among the largest privacy coins by market capitalization.

Arthur Hayes, the BitMEX co-founder, liquidated his entire Zcash position after the bug disclosure, completing the exit from his self-described "Holy Trinity" portfolio that included HYPE and NEAR tokens. The Zcash vulnerability stemmed from an insufficiently constrained element in the Orchard circuit related to elliptic curve multiplication checks that failed to properly validate inputs, according to Shielded Labs.

This article is for informational purposes only and does not constitute investment advice.