Kelp DAO Sues LayerZero Over $292 Million rsETH Exploit

Kelp DAO has filed a lawsuit against LayerZero and its co-founder Bryan Pellegrino, alleging that the cross-chain protocol's technology hid flaws that led to a $292 million rsETH bridge exploit in April.

The exploit occurred on April 18, when attackers drained about 116,500 rsETH through the LayerZero bridge. This was the largest DeFi hack of 2026, causing significant damage to Aave's total value locked (TVL), which fell by $8.45 billion in just two days.

Kelp DAO claims that LayerZero and Pellegrino publicly blamed them for the hack, despite reviewing and endorsing the protocol's deployment and configuration in writing. The team says they are holding LayerZero accountable for harm to Kelp and the DeFi ecosystem.