Cypherpunk Technologies has launched what it says is the world’s largest active Zcash mining fleet after completing a $33.33 million equity-based transaction with entities affiliated with Winklevoss Capital, giving the company approximately 18% of the privacy-focused blockchain’s current network hashrate.
The Nasdaq-listed company said on August 18 that its newly created Cypherpunk Mining operation has approximately 4.2 GSol/s of Equihash computing power already online across facilities in the United States. The acquired assets include latest-generation Z15 Pro mining machines and their associated hosting agreements.
According to an SEC filing, Cypherpunk Mining acquired the assets from Moria Mining LLC. The $33.33 million purchase price was paid through a pre-funded warrant issued to Winklevoss Treasury Investments that covers 43,290,042 Cypherpunk common shares and carries a nominal exercise price of $0.001 per share.
Winklevoss Treasury Investments already beneficially owned 19.9% of Cypherpunk before the transaction, while Will McEvoy and Khing Oei serve on Cypherpunk’s board under previously granted designation rights. Cypherpunk said its nominating and corporate governance committee approved the related-party transaction.
Mining Adds Another Route to Cypherpunk’s ZEC Accumulation
The mining expansion builds on Cypherpunk’s strategy of accumulating Zcash and investing in privacy-focused infrastructure. The company currently holds 323,394.38 ZEC, which it estimates represents approximately 1.92% of ZEC’s circulating supply, and has established a longer-term target of owning 5%.
Cypherpunk said approximately 43,800 ZEC are distributed to miners each month, or roughly 1,440 ZEC per day. At a constant 18% share of network hashrate, that network issuance would imply around 7,884 ZEC of gross monthly production attributable to an equivalent share, although actual output can vary as mining difficulty, network hashrate, uptime and pool performance change.
Mining therefore provides Cypherpunk with an alternative to purchasing all additional ZEC on the open market. The company said the operation addresses a mining market worth more than $250 million annually at current ZEC prices and expects mined ZEC to support treasury accumulation, future growth and additional privacy-technology investments.
Cypherpunk has also invested $5 million in Zcash Open Development Lab, or ZODL, adding software exposure alongside its ZEC treasury and mining infrastructure.
An 18% Hashrate Position Creates Opportunity and Concentration Risk
Cypherpunk appointed mining industry veteran Kevin Zhang as head of mining. Zhang previously worked at Foundry, where he helped build large-scale cryptocurrency mining infrastructure and mining-pool operations, after beginning Bitcoin mining in 2014 and Zcash mining in 2016.
The company argues that Zcash mining currently generates stronger economics than Bitcoin mining and AI colocation at prevailing ZEC prices. Those economics, however, remain highly sensitive to ZEC’s market value, electricity and hosting expenses, equipment performance and changes in network difficulty.
Controlling roughly 18% of current hashrate also makes Cypherpunk a significant participant in Zcash’s proof-of-work security. The scale strengthens the company’s exposure to network economics but also increases attention on mining concentration within a blockchain built around privacy and decentralization.
For investors, the transaction further ties Cypherpunk’s financial performance to Zcash. Beyond its 323,394-ZEC treasury, the company now has direct exposure to ZEC issuance and mining margins, creating a vertically integrated strategy spanning token ownership, network infrastructure and privacy-focused technology investment.