KelpDAO has initiated legal action against the cross-chain protocol LayerZero and its CEO, Bryan Pellegrino. The lawsuit follows an exploit of the rsETH bridge that occurred on April 18, resulting in the theft of 116,500 rsETH tokens, valued at approximately $292 million at the time of the incident.
In the court filing, KelpDAO alleges that LayerZero failed to disclose technological risks and did not prevent the compromise of its infrastructure. The plaintiff claims that LayerZero reviewed and provided written endorsement of the bridge's deployment and configuration prior to the attack.
LayerZero maintains that the exploit occurred because the bridge relied on a single decentralized verifier network as its sole verification path. The company stated that it had recommended the use of multiple verifiers and has since ceased acting as the exclusive verifier for applications.
CEO Bryan Pellegrino has publicly dismissed the lawsuit as meritless and indicated his intention to defend the case in Vancouver. KelpDAO has announced plans to migrate its rsETH bridge infrastructure to the Cross-Chain Interoperability Protocol developed by Chainlink.
