KelpDAO Sues LayerZero Over $292M Bridge Exploit in April

KelpDAO has taken its dispute with LayerZero into court over a $292 million bridge exploit in April. Evercrest Technologies, the company behind KelpDAO, filed a civil claim against LayerZero Labs Ltd., LayerZero Labs Canada Inc., and co-founder Bryan Pellegrino.

The allegations include negligence, negligent misrepresentation, and defamation. The underlying issue revolves around a 1-of-1 security configuration used by the bridge connecting KelpDAO infrastructure with Unichain. In April, 116,500 rsETH were moved through this bridge, worth approximately $292 million at the time.

KelpDAO claims that LayerZero reviewed and endorsed the use of a single Decentralized Verifier Network (DVN) for security, rather than warning them about its potential dangers. Later, LayerZero allegedly blamed KelpDAO for using this design.