Cypherpunk Technologies launches Zcash mining fleet with $33 million Winklevoss deal

Nasdaq-listed Zcash treasury company Cypherpunk Technologies (CYPH) announced Tuesday that it is launching the world's largest Zcash (ZEC) mining fleet.

According to its press release, Cypherpunk Mining is online as of today with roughly 4.2 GSol/s of Equihash hashrate deployed across the U.S. This represents about 18% of the total Zcash network.

With this launch, Cypherpunk can now offer its investors exposure to Zcash treasury and mining, the release said.

"The Zcash flow from Cypherpunk Mining provides financial and operational flexibility to fund future growth, the acquisition of additional ZEC, and new privacy-preserving technology investments," said Will McEvoy, chief investment officer of Cypherpunk.

The mining rigs were funded through a $33.33 million equity deal with Cameron and Tyler Winklevoss's venture firm, Winklevoss Capital. The firm has appointed longtime mining industry expert Kevin Zhang as head of mining at Cypherpunk.

The company said that the transaction made its mining affiliate the Zcash network's largest active fleet, with access to an addressable market value of more than $250 million per year, at current ZEC prices.

"Cypherpunk's incentives are aligned with the network's," the release said. "The additional mining hashrate and decentralization strengthens Zcash network security, and a more secure Zcash makes Cypherpunk's treasury more valuable."

The company added that mining operations will bolster its mission to reach 5% of ZEC's entire supply. Cypherpunk currently holds 323,394 ZEC, which is about 1.92% of the circulating supply, according to the statement.

Meanwhile, Zcash had a major security scare earlier this year when Shielded Labs researcher Taylor Hornby discovered a vulnerability in Zcash's Orchard pool involving a flaw in its zero-knowledge circuit that could theoretically have allowed an attacker to create counterfeit ZEC without detection. 

The token had plunged over 50% at the time, alongside a 40% drop in Cypherpunk's stock price. Zcash developers issued an immediate emergency patch in early June and deployed the Ironwood upgrade in July to further fortify the network.