KelpDAO sues LayerZero, CEO over $292M rsETH bridge exploit
KelpDAO says LayerZero endorsed its bridge setup before the attack, while CEO Bryan Pellegrino has dismissed the lawsuit as meritless.
KelpDAO has filed a lawsuit against cross-chain messaging protocol LayerZero and its CEO Bryan Pellegrino, seeking damages related to a $292 million exploit involving its rsETH bridge. According to KelpDAO, LayerZero reviewed and endorsed the bridge configuration prior to the attack, making the protocol and its leadership liable for the resulting losses. Pellegrino has publicly dismissed the legal action, calling it meritless.
KelpDAO is a liquid restaking protocol built on EigenLayer, offering users rsETH as a liquid representation of restaked assets. The exploit targeted the cross-chain bridge infrastructure connecting the protocol's rsETH token across networks. KelpDAO contends that LayerZero's prior approval of the setup creates a direct line of responsibility, a claim that LayerZero's leadership has firmly rejected.
The lawsuit raises broader questions about accountability in decentralized infrastructure, particularly around third-party endorsements of bridge configurations. Cross-chain bridges have been among the most frequently exploited components in the DeFi ecosystem, with hundreds of millions of dollars lost in similar incidents over recent years. Legal action of this scale signals a growing willingness among crypto projects to pursue traditional legal remedies following major losses.
Industry observers will be watching how courts approach questions of liability when one protocol formally reviews or endorses another's technical setup. The outcome could set a meaningful precedent for how due diligence responsibilities are defined across DeFi collaborations.
Source: Cointelegraph
