KelpDAO Files Lawsuit Against LayerZero and Co-Founder Over rsETH Cross-Chain Bridge Exploit
AI Market Summary
KelpDAO's lawsuit against LayerZero and CEO Bryan Pellegrino over the rsETH bridge exploit (116,500 rsETH, ~$292m) reopens counterparty and security concerns around cross-chain messaging. Legal escalation and disputed liability can chill risk appetite across LST/LRT ecosystems and DeFi bridging, while increasing perceived operational and reputational risk for protocols integrating LayerZero. Near-term sentiment is negative for ETH-adjacent restaking liquidity and bridge activity.
Impact level
● High
Affected assets
ETH/USDT-0.39%
AI Insight · ETH/USDTAI Insight
▼ Bearish
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KelpDAO said on X that it has sued LayerZero and co-founder Bryan Pellegrino, seeking accountability for an rsETH cross-chain bridge exploit earlier this year.
According to the complaint, LayerZero allegedly failed to adequately disclose key technical weaknesses and risks, did not prevent a compromise of its security infrastructure, and had previously reviewed and approved Kelp's deployment and configuration in writing. KelpDAO's statement also said LayerZero has recently publicly accepted responsibility for the incident.
KelpDAO said it has taken steps to protect user assets since the attack, including migrating the rsETH cross-chain bridge to a more secure cross-chain standard.
Pellegrino, LayerZero's co-founder and CEO, said on Twitter that KelpDAO's allegations are unfounded and that he will defend against them in Vancouver.
LayerZero had previously published an incident report stating that on April 18, 2026, the KelpDAO rsETH cross-chain bridge built on LayerZero was compromised, with roughly 116,500 rsETH stolen, valued at about $292 million.
