KelpDAO Sues LayerZero, Alleging It Caused $292 Million Hack

KelpDAO, a decentralized liquid staking protocol, has sued cross-chain protocol LayerZero, alleging it was responsible for a $292 million hack in April.

CoinDesk reported on Sept. 25 that KelpDAO filed a civil lawsuit in British Columbia against LayerZero and its co-founder Bryan Pellegrino. KelpDAO alleges LayerZero failed to adequately disclose vulnerabilities and risks in its technology, leading to the large-scale hack.

KelpDAO's cross-chain bridge was attacked on April 22, and 116,500 rsETH was stolen. The loss was valued at about $292 million at the time, making it the largest hack of the year. A North Korean hacking group was identified as the suspected attacker.

KelpDAO said the attack was a direct result of LayerZero's failure to fulfill its obligations, including disclosing weaknesses and risks in its technology. It also said LayerZero failed to prevent a breach of its security infrastructure, allowing the attacker to exploit vulnerabilities in the cross-chain bridge.

LayerZero denied the allegations. Pellegrino said KelpDAO had filed a civil lawsuit against him and LayerZero, and that the claims were without merit.