KelpDAO Sues LayerZero Over $292 Million Exploit

KelpDAO has filed a lawsuit against LayerZero following a $292 million attack, calling it the largest exploit of 2026. The project accused LayerZero and co-founder Brian Pellegrino of concealing vulnerabilities and risks associated with the cross-chain bridge technology. KelpDAO claims that the exploit resulted from LayerZero's shortcomings, including undisclosed vulnerabilities that allowed attackers to exploit weaknesses in the infrastructure. KelpDAO, a decentralized liquid staking protocol on the Ethereum network, also stated that LayerZero failed to prevent the security breach. Pellegrino responded that the lawsuit will be heard in a Canadian court and called it baseless. According to KelpDAO, on April 22, the project's cross-chain bridge was attacked by hackers from North Korea, who drained 116,500 rsETH worth approximately $292 million. The aftermath of the attack affected stablecoin markets and increased liquidity pressure, leading Aave, the largest lending pool in DeFi, to borrow $300 million to cover the rising demand for withdrawals. A few days after the incident, the total value locked in DeFi decreased by $20 billion. KelpDAO has taken measures to protect user assets and enhance security by migrating the rsETH bridge to a more secure cross-chain standard.

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