KelpDAO sues LayerZero and CEO over $292M rsETH bridge exploit

The cross-chain lending protocol accused LayerZero and its co-founder Brian Pellegrino of failing to disclose weaknesses in their protocol, which led to the $292 million hack.

KelpDAO sued LayerZero and its co-founder, Bryan Pellegrino, alleging that undisclosed weaknesses in the cross-chain protocol enabled a $292 million exploit.

Pellegrino called the lawsuit meritless and said he would defend himself and LayerZero in a British Columbia court.

The April 22 attack drained 116,500 rsETH and contributed to a broader liquidity crisis that erased $20 billion in decentralized finance deposits.

KelpDAO filed a lawsuit against LayerZero and its co-founder, blaming the universal bridge protocol for the largest exploit of this year, which drained $292 million and triggered one of the largest DeFi runs in crypto history, according to a post on X on Thursday .

“The exploit was a direct result of LayerZero’s failures, including a failure to disclose weaknesses and risks inherent in LayerZero’s own technology,” KelpDAO said.

KelpDAO, a decentralized liquid staking protocol on Ethereum, also accused LayerZero of failing to prevent infiltration of its security infrastructure, claiming that this allowed attackers to exploit the universal bridge’s alleged weaknesses.

“Rather than take responsibility, over the last few months, LayerZero and Mr. Pellegrino publicly blamed us for their failures,” KelpDAO said.

Pellegrino immediately responded that he would see them in a Canadian court.

“Evercrest (KelpDAO) filed a notice of civil claim today in BC (British Columbia, Canada) against myself and LZ (LayerZero),” Pellegrino said. “The claim continues to be meritless. I will meet them in Vancouver and defend myself accordingly.”

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