The Kelp protocol has initiated legal action against LayerZero and its co-founder, Bryan Pellegrino. The lawsuit follows an April exploit of the rsETH bridge, which resulted in losses totaling approximately $292 million. Kelp alleges that LayerZero failed to disclose vulnerabilities in its infrastructure and did not prevent the security breach.
According to the filing, the defendants provided written approval for the deployment and configuration of the bridge. Kelp claims that LayerZero engaged in negligent misrepresentation and defamation. On April 18, attackers successfully drained 116 500 rsETH from the bridge. While the parties disputed the cause of the exploit for months, Kelp maintains that the underlying infrastructure was compromised.
Bryan Pellegrino has dismissed the lawsuit as meritless and announced plans to defend his position in a Vancouver court. Despite the incident, Kelp confirmed that it fully restored the backing for the rsETH token in May. The legal proceedings mark a significant escalation in the ongoing conflict between the two DeFi projects regarding responsibility for the massive security failure.
