KelpDAO Sues LayerZero, Alleging It Caused $292 Million Hack

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

KelpDAO's cross-chain bridge was attacked on April 22, resulting in the theft of 116,500 rsETH. The loss was estimated at about $292 million at the time, making it the largest hack of the year. A North Korean hacking group was identified as being behind the attack.

KelpDAO said the attack was a direct result of LayerZero's failure to meet its obligations, including disclosing weaknesses and risks in its technology. It also alleged that LayerZero failed to block an intrusion into its security infrastructure, allowing the attackers to exploit vulnerabilities in the cross-chain bridge.

LayerZero denied the allegations. Pellegrino said KelpDAO had filed a civil suit against him and LayerZero and that the claims were baseless.