KelpDAO vs. LayerZero — Civil Lawsuit (September 2026)
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On September 24, 2026, Evercrest Technologies Inc. (the operator of KelpDAO) filed a civil claim in the Supreme Court of British Columbia against LayerZero Labs Ltd. and its co-founder and CEO Bryan Pellegrino, seeking damages arising from the April 18, 2026 exploit that drained 116,500 rsETH valued at approximately $292 million from KelpDAO's LayerZero-powered cross-chain bridge. The suit alleges negligence, negligent misrepresentation, and defamation, and represents the first major civil litigation in Canada seeking to hold a DeFi messaging-layer infrastructure provider directly liable for an exploit loss. The case is ongoing and no findings have been made.
Connected Entities
1 entityNo connected entities recorded yet — this investigation is not currently linked to any other page in the index.
Timeline(13 events)
1 February 2024
Evercrest (KelpDAO) alleges LayerZero reviewed and endorsed single-verifier bridge configuration in written communications (earliest alleged endorsement date per complaint).
Unchained Crypto1 January 2025
Evercrest alleges a further written endorsement of the single-verifier configuration from LayerZero in January 2025; complaint also alleges LayerZero warned a separate developer (reportedly USDT0) about 1-of-1 verifier risks around this period without warning Kelp.
Cryptopolitan1 March 2026
Attackers (attributed with preliminary confidence to North Korea's TraderTraitor/Lazarus Group) compromise LayerZero RPC nodes used by the Kelp bridge verifier via social engineering of a developer, according to LayerZero's post-mortem.
Unchained Crypto18 April 2026
KelpDAO's rsETH LayerZero-powered bridge is exploited at 17:35 UTC, releasing 116,500 rsETH (~$292 million) to an attacker-controlled address via compromised RPC nodes feeding false data to the 1-of-1 LayerZero DVN verifier.
The Block18 April 2026
KelpDAO's emergency multisig pauses core contracts at 18:21 UTC (46 minutes after the drain). Two follow-up exploit attempts targeting ~40,000 rsETH are blocked at 18:26 and 18:28 UTC.
Unchained Crypto19 April 2026
LayerZero publishes post-mortem, attributing the exploit to North Korea's Lazarus Group and stating that Kelp's 1-of-1 verifier setup 'directly contradicts the multi-DVN redundancy model' LayerZero recommends. KelpDAO publicly disputes this characterization.
CoinDesk21 April 2026
Arbitrum's Security Council freezes approximately 30,766 ETH (~$71 million) connected to the exploit.
CoinDesk1 May 2026
U.S. District Court for the Southern District of New York issues a restraining order barring Arbitrum DAO from transferring the frozen 30,766 ETH, following claims filed by North Korea terrorism judgment creditors.
Unchained Crypto5 May 2026
KelpDAO publicly claims LayerZero approved the bridge configuration in writing and that the exploit was a result of LayerZero's failures, directly contradicting LayerZero's April 19 statements.
CoinDesk1 June 2026
Aave reports restoration of rsETH backing, following DeFi ecosystem recovery efforts addressing the approximately $177 million in bad debt created when stolen rsETH was used as collateral.
CryptoTimes9 July 2026
Over $7.2 billion in TVL has been announced to migrate from LayerZero to Chainlink CCIP; Mantle joins the exodus.
CoinDesk24 September 2026
Evercrest Technologies Inc. files notice of civil claim (case no. 267169) in the Supreme Court of British Columbia against LayerZero Labs Ltd. and Bryan Pellegrino, alleging negligence, negligent misrepresentation, and defamation.
CryptoTimes25 September 2026
Lawsuit reported publicly; Bryan Pellegrino responds publicly calling the claim 'meritless' and stating he will defend it in Vancouver.
CoinDeskDecision Log
- hash: 2sQ4a3XgshVLoxKpMSoJNRpeuMsxd1X2xBpjGqkfVnLs
This investigation is cryptographically anchored to the Solana blockchain (1 event). 20 of 20 cited source URLs have an Internet Archive snapshot.
model: claude-code-investigator
generated: 9/30/2026, 12:04:17 PM
last updated: 9/30/2026, 4:53:44 PM
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