KelpDAO Sues LayerZero Over $292M Hack, Alleging Security Failures

KelpDAO has filed a lawsuit against LayerZero and its CEO Bryan Pellegrino over a $292 million hack of its rsETH token in April. The suit, filed in British Columbia, is KelpDAO's most direct attempt yet to hold LayerZero accountable for the breach.

KelpDAO accused LayerZero of security failures, alleging that the exploit resulted from the bridge provider's failure to disclose weaknesses in its technology and prevent an infiltration of its security infrastructure. In a statement on X, KelpDAO claimed that LayerZero reviewed and endorsed its deployment and configuration of the bridge's technology, directly contradicting LayerZero's argument that the attack was isolated to KelpDAO's rsETH configuration.

KelpDAO maintained that the 1-of-1 Decentralized Verifier Network (DVN) setup used by LayerZero was not an unusual configuration chosen against its guidance. Instead, it argued that the setup followed LayerZero's official documentation and default deployment practices.