KelpDAO has filed a lawsuit against LayerZero and its co-founder Bryan Pellegrino, accusing the bridge provider of security failures behind the $292 million exploit of its rsETH token in April.<\/p>\n
The suit, filed in British Columbia, is KelpDAO\u2019s most direct attempt yet to hold LayerZero accountable after months of public disagreement over what caused the breach.<\/p>\n
In a statement posted on X on September 25, KelpDAO alleged<\/a> that the exploit resulted from LayerZero\u2019s failure to disclose weaknesses in its technology and prevent an infiltration of its security infrastructure.<\/p>\n \u201cRather than take responsibility, over the last few months, LayerZero and Mr. Pellegrino publicly blamed us for their failures,\u201d KelpDAO stated. \u201cBut the record is straightforward: LayerZero reviewed and endorsed\u2014in writing\u2014our deployment and configuration of LayerZero\u2019s technology.\u201d<\/p>\n That directly challenges LayerZero\u2019s argument that the attack was isolated to KelpDAO\u2019s rsETH configuration because the bridge used a 1-of-1 Decentralized Verifier Network, or DVN.<\/p>\n Under that setup, LayerZero\u2019s own DVN was the sole verifier, meaning a forged cross-chain message could be accepted without a second independent verifier rejecting it.<\/p>\n LayerZero maintained that it had recommended using multiple DVNs to avoid such a single point of failure. But KelpDAO pushed back on that account in a May 6 report. The protocol argued<\/a> that the 1-of-1 configuration was not an unusual setup chosen against LayerZero\u2019s guidance. Instead, it claimed the configuration followed LayerZero\u2019s official documentation and default deployment practices.<\/p>\n Up until supposed white-hat hackers drained<\/a> $320 million from Liquid Network (most of which was returned) and today\u2019s $351 million Bitget hot wallet breach<\/a>, the KelpDAO incident had been the largest crypto security exploit of 2026.<\/p>\n Cyvers at the time estimated<\/a> that about $293.7 million in rsETH was drained, with the attacker moving the assets into ETH across Ethereum and Arbitrum, while lending protocols including Aave V3, Compound V3, and Euler were also affected.<\/p>\n In its own words, KelpDAO wants to set the record straight and \u201chold LayerZero and Mr. Pellegrino accountable for the harm they have caused.\u201d<\/p>\n And the LayerZero CEO responded within hours on X, confirming<\/a> that Evercrest, KelpDAO\u2019s parent entity, had filed a notice of civil claim against him and his company in British Columbia.<\/p>\n \u201cThe claim continues to be meritless, will meet them in Vancouver and defend myself accordingly,\u201d he wrote.<\/p>\n Also on X, Solana Foundation\u2019s Seraphim Czecker summed up<\/a> the mood around founding DeFi as something closer to a Game of Thrones plotline, where you are either at the top making hundreds of millions of dollars or your business is suffocating and dying.<\/p>\n \u201cIf you get hacked, you get sued into oblivion and lose years to court battles,\u201d he added.<\/p>\n The post KelpDAO Sues LayerZero and CEO Bryan Pellegrino Over $292M Hack<\/a> appeared first on CryptoPotato<\/a>.<\/p>","protected":false},"excerpt":{"rendered":" KelpDAO has filed a lawsuit against LayerZero and its co-founder Bryan Pellegrino, accusing the bridge provider of security failures behind the $292 million exploit of its rsETH token in April. The suit, filed in British Columbia, is KelpDAO\u2019s most direct attempt yet to hold LayerZero accountable after months of public disagreement over what caused the […]<\/p>\n","protected":false},"author":0,"featured_media":0,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[4],"tags":[],"class_list":["post-232431","post","type-post","status-publish","format-standard","hentry","category-discovery"],"_links":{"self":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/232431"}],"collection":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/types\/post"}],"replies":[{"embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcomments&post=232431"}],"version-history":[{"count":0,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=\/wp\/v2\/posts\/232431\/revisions"}],"wp:attachment":[{"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fmedia&parent=232431"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Fcategories&post=232431"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/mycryptomania.com\/index.php?rest_route=%2Fwp%2Fv2%2Ftags&post=232431"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}Pellegrino Ready to Defend Himself<\/h2>\n