KelpDAO sues LayerZero after $292M DeFi bridge exploit
6.6 Security KelpDAO sued LayerZero after a $292M bridge exploit, alleging undisclosed risks and security failures. The incident sparked a major DeFi liquidity crisis. LayerZero denies responsibility.
KelpDAO has filed a lawsuit against LayerZero and its co-founder Bryan Pellegrino in British Columbia, following an April exploit that drained approximately $292 million (116,500 rsETH) from KelpDAO’s cross-chain bridge. KelpDAO alleges that LayerZero failed to disclose risks and weaknesses in its technology and did not prevent attackers from compromising its security infrastructure, enabling the exploit. The legal claim also states that LayerZero had reviewed and approved KelpDAO’s bridge deployment and configuration in writing before the attack. Described as the largest DeFi exploit of 2026, the incident triggered a broader liquidity crisis, erasing $20 billion in decentralized finance deposits and sharply reducing total value locked across major protocols. LayerZero’s incident report confirmed attackers compromised its infrastructure before the forged transaction. Bryan Pellegrino has dismissed the lawsuit as meritless, vowing to defend himself and LayerZero in court. The dispute centers on responsibility for the exploit, with both parties publicly blaming each other since the attack.
