LayerZero Labs Faces $292 Million Lawsuit Over rsETH Exploit

KelpDAO operator Evercrest Technologies has filed a lawsuit against LayerZero Labs, its Canadian affiliate, and CEO Bryan Pellegrino following the $292 million rsETH exploit in April. The complaint alleges negligence and defamation, noting that Kelp users have withdrawn over $650 million since the incident. The exploit occurred after attackers compromised LayerZero's RPC environment and tricked its verifier into signing a fraudulent cross-chain transfer. While LayerZero has dismissed the claims as meritless, the security breach has prompted projects representing approximately $14.5 billion in assets to migrate from LayerZero to Chainlink's CCIP.