KelpDAO sues LayerZero over $292 million rsETH bridge exploit

KelpDAO has filed a lawsuit against LayerZero and its CEO Bryan Pellegrino after the April exploit of its rsETH bridge, which the project says led to about $292 million in losses. KelpDAO alleges that LayerZero failed to disclose security risks and had previously approved the bridge’s deployment and configuration. LayerZero has rejected the claims, with Pellegrino calling the lawsuit meritless and saying he will defend the case in Vancouver. The dispute centers on whether the attack was caused by LayerZero’s infrastructure, KelpDAO’s bridge setup, or a combination of both. According to prior reports, attackers used a forged crosschain message to drain 116,500 rsETH from the bridge. LayerZero said its incident review found that its internal nodes were compromised and that Kelp’s use of a single verifier created a security weakness. KelpDAO has since said it plans to move the bridge to Chainlink’s crosschain protocol.