KelpDAO Sues LayerZero Labs Over $292 Million rsETH Exploit

Evercrest Technologies, the developer of the liquid restaking protocol KelpDAO, has filed a lawsuit against LayerZero Labs and its CEO Bryan Pellegrino in the Supreme Court of British Columbia. The legal action follows a security incident on April 18, where 116,500 rsETH were drained from a bridge between Unichain and Ethereum. The exploit occurred due to a vulnerability in a '1-of-1' configuration, which allowed the processing of fraudulent cross-chain messages. KelpDAO alleges that LayerZero approved the configuration, while LayerZero claims the protocol ignored its recommendations. The incident resulted in significant financial losses, including the depletion of liquidity and negative impacts on the KERNEL token price.