KelpDAO Sues LayerZero Over $292 Million rsETH Exploit
KelpDAO alleges undisclosed weaknesses in LayerZero enabled an April 22 attack that drained 116,500 rsETH. LayerZero co-founder Bryan Pellegrino called the claim meritless and plans to fight it in court.
KelpDAO has sued LayerZero and co-founder Bryan Pellegrino over the $292 million exploit that drained 116,500 rsETH from its cross-chain bridge on April 22.
The Ethereum liquid staking protocol alleges LayerZero failed to disclose weaknesses and risks in its technology. KelpDAO also claims LayerZero did not prevent attackers from infiltrating its security infrastructure, allowing them to exploit alleged flaws in the universal bridge protocol.
“The exploit was a direct result of LayerZero’s failures, including a failure to disclose weaknesses and risks inherent in LayerZero’s own technology,” KelpDAO said in a post on X.
Pellegrino rejected the allegations and said he would defend himself and LayerZero in British Columbia. “The claim continues to be meritless. I will meet them in Vancouver and defend myself accordingly,” he said.
A North Korean hacking group allegedly carried out the attack while the bridge held nearly one-fifth of the restaked token’s circulating supply. The theft was the largest crypto exploit of 2026 so far, according to the source article.
The fallout spread into stablecoin markets and intensified a broader DeFi liquidity crunch. Aave borrowed $300 million to meet growing demand for asset withdrawals, while $20 billion in total value locked was erased within days of the exploit.
KelpDAO said it has since taken steps to protect user assets, including moving the rsETH bridge to what it described as a more secure cross-chain security standard. The protocol said the lawsuit is also intended to hold LayerZero and Pellegrino accountable for damage to KelpDAO and the wider DeFi ecosystem.
