KelpDAO Sues LayerZero Over $292M rsETH Exploit
KelpDAO has filed a lawsuit against LayerZero and its CEO, Bryan Pellegrino, over the $292 million exploit that hit its rsETH bridge in April. The complaint alleges that LayerZero's security infrastructure was flawed and failed to disclose key risks, allowing attackers to compromise its systems.
The lawsuit claims that LayerZero reviewed and supported KelpDAO's deployment and configuration before the incident, contradicting the protocol's narrative that the loss was primarily driven by how KelpDAO configured its bridge. Pellegrino has denied the allegations, calling them 'meritless' and indicating he will defend the case in Vancouver.
The dispute highlights a broader pattern in DeFi cross-chain disputes, where responsibility is contested between protocol infrastructure failures and application-level design choices. The outcome of this case may set a precedent for future incidents, as it revolves around whether infrastructure providers warned partners about known failure modes and whether integrations conformed to what both sides understood to be secure at the time.