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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’s 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’s failure to disclose weaknesses in its technology and prevent an infiltration of its security infrastructure.<\/p>\n “Rather than take responsibility, over the last few months, LayerZero and Mr. Pellegrino publicly blamed us for their failures,” KelpDAO stated. “But the record is straightforward: LayerZero reviewed and endorsed\u2014in writing\u2014our deployment and configuration of LayerZero\u2019s technology.”<\/p>\n<\/blockquote>\n That directly challenges LayerZero’s argument that the attack was isolated to KelpDAO’s rsETH configuration because the bridge used a 1-of-1 Decentralized Verifier Network, or DVN.<\/p>\n Under that setup, LayerZero’s 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’s guidance. Instead, it claimed the configuration followed LayerZero’s 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’s $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 “hold LayerZero and Mr. Pellegrino accountable for the harm they have caused.”<\/p>\n And the LayerZero CEO responded within hours on X, confirming<\/a> that Evercrest, KelpDAO’s parent entity, had filed a notice of civil claim against him and his company in British Columbia.<\/p>\n “The claim continues to be meritless, will meet them in Vancouver and defend myself accordingly,” he wrote.<\/p>\n<\/blockquote>\n Also on X, Solana Foundation’s 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 “If you get hacked, you get sued into oblivion and lose years to court battles,” he added.<\/p>\n<\/blockquote>\n The post KelpDAO Sues LayerZero and CEO Bryan Pellegrino Over $292M Hack<\/a> appeared first on CryptoPotato<\/a>.<\/p>\n\n\n
Pellegrino Ready to Defend Himself<\/h2>\n
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