KelpDAO sues LayerZero, CEO over $292M rsETH bridge exploit
Reported by Cointelegraph · AI-assisted summary by ChikoCorp AI News Desk
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Summary
KelpDAO has filed a lawsuit against cross-chain protocol LayerZero and its CEO Bryan Pellegrino, alleging that LayerZero's security failures contributed to the $292 million exploit of KelpDAO’s rsETH bridge earlier this year. KelpDAO claims LayerZero did not disclose risks or prevent attackers from compromising its infrastructure and had previously reviewed and endorsed the bridge's deployment and configuration.
Why it matters
The source suggests this legal action highlights ongoing disagreements about where responsibility lies for the exploit, which affected a significant DeFi bridge and could influence accountability standards in the industry. The dispute underscores challenges in managing cross-chain security and verification processes.
Key context
The hack on April 18 led to the theft of 116,500 rsETH worth about $292 million. LayerZero explained the breach resulted from compromised internal nodes that approved a forged cross-chain message, allowing the bridge (which relied on a single decentralized verifier network from LayerZero) to release funds without additional verification. LayerZero recommended using multiple verifiers and ceased being the sole verifier for applications afterward. KelpDAO disputes this, asserting the configuration was confirmed secure by LayerZero and accuses LayerZero of insufficiently warning about risks. KelpDAO now plans to move its rsETH bridge to Chainlink’s Cross-Chain Interoperability Protocol.
Key numbers and entities
The notable figures and entities are KelpDAO, LayerZero, LayerZero CEO Bryan Pellegrino, the stolen amount of 116,500 rsETH valued at roughly $292 million, and Chainlink’s Cross-Chain Interoperability Protocol as the intended new platform for KelpDAO’s bridge.
What remains unclear
The lawsuit details, such as specific legal claims or remedies sought by KelpDAO, and LayerZero’s detailed response remain unclear. The source does not clarify how the courts might adjudicate liability or how this dispute will affect future cross-chain protocol governance and security practices.