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KelpDAO Sues LayerZero Over $292M rsETH Exploit
KelpDAO says LayerZero’s security failures let attackers drain 116,500 rsETH and forced major DeFi lenders to absorb market stress.
- Evercrest Technologies Inc., the legal entity behind KelpDAO, filed a civil claim in British Columbia against LayerZero and co-founder Bryan Pellegrino on Thursday, seeking damages for an April 18 exploit that drained 116,500 rsETH worth approximately $292 million.
- KelpDAO alleges LayerZero failed to disclose security weaknesses, allowing attackers to penetrate infrastructure before the bridge released funds, while LayerZero maintains Kelp utilized a 1-of-1 Decentralized Verifier Network configuration lacking independent checks.
- While LayerZero reported attackers socially engineered a developer to obtain credentials, KelpDAO claims the protocol reviewed and approved its configuration in writing before the exploit, contradicting LayerZero's argument that the setup was dangerous.
- Kelp committed 2,000 ETH to recovery efforts and migrated cross-chain transfers to Chainlink CCIP; a second attack attempt involving 40,000 rsETH was thwarted when Kelp paused its contracts roughly 46 minutes after the initial drain.
- Pellegrino intends to contest the action in Vancouver, according to public statements; under the province's Supreme Court Civil Rules, defendants generally have 21 to 49 days to respond, depending on service location.
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19 Articles
KelpDAO Sues LayerZero and CEO Bryan Pellegrino Over $292M rsETH Exploit
TLDR: Evercrest filed a civil claim against LayerZero and Bryan Pellegrino over April’s $292 million rsETH exploit. KelpDAO alleges LayerZero failed to disclose risks despite reviewing and approving its bridge configuration. LayerZero argues KelpDAO’s 1-of-1 verifier setup created the key security weakness behind the exploit. KelpDAO is migrating rsETH cross-chain transfers to a new security [...]
Illustrative image Photo: PexelsStacking protocol accuses LayerZero for the greatest exploit of the year, which drained $292 million
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