KelpDAO Sues LayerZero Over $292M Hack Citing Negligent Misrepresentation

KelpDAO has filed a civil claim in the Supreme Court of British Columbia against LayerZero Labs Ltd., its Canadian arm, and co-founder and CEO Bryan Pellegrino. The lawsuit accuses LayerZero and Pellegrino of negligent misrepresentation, negligence, and defamation.

The case stems from a $292 million hack on KelpDAO's cross-chain bridge in April, which used LayerZero's messaging stack. Evercrest Technologies, the company behind KelpDAO, alleges that an attacker exploited a vulnerability in LayerZero's internal nodes six weeks before the actual hack occurred.

KelpDAO claims that LayerZero reviewed and signed off on the configuration of its bridge in writing, which used a single-verifier setup instead of the recommended multi-DVN redundancy model.