The Kelp protocol has initiated legal action against LayerZero and its co-founder, Brian Pellegrino, following an exploit of the rsETH bridge that resulted in losses amounting to approximately $292 million in April.
— Kelp (@KelpDAO) September 25, 2026
The plaintiffs allege that LayerZero failed to disclose vulnerabilities in its solution and did not take adequate measures to secure the protective infrastructure.
The lawsuit claims that the defendants "reviewed and approved in writing" the deployment and configuration of the bridge. It also includes accusations of negligence and defamation.
"Our top priority has always been and will continue to be the security of users' assets. However, we also need to address the situation and hold LayerZero and Pellegrino accountable for the damage they have caused to us and the entire DeFi ecosystem," Kelp representatives stated.
Pellegrino has described the lawsuit as "baseless" and announced his intention to defend his interests in the Vancouver court.
On April 18, attackers siphoned off 116,500 rsETH from the LayerZero-based bridge. The dispute over the causes of the exploit has persisted for several months.
Kelp has maintained that LayerZero's infrastructure was compromised. Initially, the opposing side pointed to a vulnerability in a partner's configuration but later admitted to some fault.
It is worth noting that Kelp fully restored the collateral for the rsETH token back in May.
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