GoTycheThe cross-chain lending protocol accused LayerZero and its co-founder Brian Pellegrino of failing to disclose weaknesses in their protocol, which led to the $292 million hack.
KelpDAO sues LayerZero for the largest exploit 2026 has seen so far
The cross-chain lending protocol accused LayerZero and its co-founder Brian Pellegrino of failing to disclose weaknesses in their protocol, which led to the $292 million hack.
KelpDAO sued LayerZero and its co-founder, Bryan Pellegrino, alleging that undisclosed weaknesses in the cross-chain protocol enabled a $292 million exploit. Pellegrino called the lawsuit meritless and said he would defend himself and LayerZero in a British Columbia court. The April 22 attack drained 116,500 rsETH and contributed to a broader liquidity crisis that erased $20 billion in decentralized finance deposits.
KelpDAO filed a lawsuit against LayerZero and its co-founder, blaming the universal bridge protocol for the largest exploit of this year, which drained $292 million and triggered one of the largest DeFi runs in crypto history, according to a post on X on Thursday.
“The exploit was a direct result of LayerZero’s failures, including a failure to disclose weaknesses and risks inherent in LayerZero’s own technology,” KelpDAO said.
KelpDAO, a decentralized liquid staking protocol on Ethereum, also accused LayerZero of failing to prevent infiltration of its security infrastructure, claiming that this allowed attackers to exploit the universal bridge’s alleged weaknesses.
“Rather than take responsibility, over the last few months, LayerZero and Mr. Pellegrino publicly blamed us for their failures,” KelpDAO said.
Pellegrino immediately responded that he would see them in a Canadian court.
“Evercrest (KelpDAO) filed a notice of civil claim today in BC (British Columbia, Canada) against myself and LZ (LayerZero),” Pellegrino said. “The claim continues to be meritless. I will meet them in Vancouver and defend myself accordingly.”
A North Korean hack group allegedly attacked KelpDAO’s cross-chain bridge on April 22. At the time, it was holding nearly a fifth of the restaked token’s circulating supply, draining 116,500 rsETH, worth roughly $292. The aftershocks of the exploit spread across stablecoin markets, including forcing Aave, the largest decentralized finance (DeFi) lending pool, to borrow $300 million to meet increasing user demand for asset withdrawals. Days later, the exploit erased $20 billion in total value locked (TVL), exposing the structural risks still present in DeFi, according to experts, including those at JPMorgan.
KelpDAO also said that, since the incident, it has taken action to ensure user assets are safe and protected, including migrating rsETH’s bridge to a more secure cross-chain security standard.
“But we also need to correct the record, and hold LayerZero and Mr. Pellegrino accountable for the harm they have caused us and the broader DeFi ecosystem,” it said.
1Bitcoin ETFs have erased a $5.8 billion hole 27 minutes ago 2Live updates: Bitcoin steadies near $84,000 as the bond selloff pauses2 hours ago 3Bitget's $352 million hack happened via spoofed transfers, not private keys, CEO Gracy Chen says5 hours ago 4New York sues Polymarket, alleging it is running an illegal gambling operation10 hours ago 5U.S. Federal Reserve moves on proposals to implement GENIUS Act for stablecoins11 hours ago 6Crypto exchange Bitget says $352 million affected in a hack, claims user funds are 'safe'11 hours ago 7Someone was trying to sell Ondo Finance after founder Nathan Allman's death13 hours ago 8Bullish, Alpaca and Apex Fintech form coalition to push issuer-backed tokenized stocks13 hours ago 9U.S. commodities firms can invest in tokenized assets, use blockchain records: CFTC13 hours ago 10The stock token debate, and the gap nobody can close alone13 hours ago
The Definitive Stablecoin Landscape Series: Asia Pacific
The Definitive Stablecoin Landscape Series: Asia Pacific
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Why it matters:
As stablecoins move into regulated finance, APAC is becoming a key proving ground. This report maps the region’s rules, use cases, and RLUSD’s role.
Someone was trying to sell Ondo Finance after founder Nathan Allman's death
Bullish, Alpaca and Apex Fintech form coalition to push issuer-backed tokenized stocks
Crypto casino Duelbits goes offline after $7 million hot wallet hack