Evercrest, which LayerZero co- founder and CEO Bryan Pellegrino also calls KelpDAO, has filed a civil lawsuit in British Columbia against both LayerZero and Pellegrino himself. The case is about the rsETH bridge hack that took place in April 2026, where hackers stole about 116,500 rsETH, worth roughly $292 million at the time. This lawsuit marks another stage in an argument that has been going on since the attack, with both sides telling different stories about what happened.
According to a post on X by KelpDAO, LayerZero did not speak up about important risks and weaknesses in its technology and did not stop its own security systems from being compromised. KelpDAO also claims that LayerZero had reviewed and approved how the bridge was set up, in writing. Pellegrino has denied these claims, calling the lawsuit baseless and promising to defend himself in Vancouver.
— Kelp (@KelpDAO) SEPTEMBER 25, 2026
KelpDAO Takes the Dispute to Court
KelpDAO’s lawsuit puts the blame for the rsETH bridge hack in the courtroom. In the lawsuit, the DAO has pointed out that the attack was not just about how it configured its system. Instead, KelpDAO argues there were problems with LayerZero’s tech and that attackers got in through LayerZero’s own security failures.
Another key point from KelpDAO is that they had already shown LayerZero how they set things up, and LayerZero had given written approval. For KelpDAO, this challenges any idea that their own decisions alone caused the exploit.
The lawsuit names Pellegrino personally, not just his company. He has already gone public to say the whole thing is without merit and that he will fight it out in court. That is his side of the story, the court has not decided anything yet.
Evercrest (KelpDAO) filed a notice of civil claim today in BC against myself and LZ. The claim continues to be meritless, will meet them in Vancouver and defend myself accordingly.
— Bryan Pellegrino (臭企鹅) (@PrimordialAA) SEPTEMBER 24, 2026
The April rsETH Bridge Exploit
The dispute comes after the April 2026 hack of KelpDAO’s rsETH bridge, built with LayerZero tech. The attack stole about 116,500 rsETH, worth about $292 million back then.
The two sides can’t agree on what made the hack possible. LayerZero says it was mainly about KelpDAO’s security setup. Specifically, the bridge used just a single verifier, so only one check was needed for any transaction to go through.
But KelpDAO pushes back on that claim. They say LayerZero signed off on the setup and never warned them properly about any risks.
Another layer here is that LayerZero’s own security was breached. After looking into it, LayerZero said someone had targeted their own developer with social engineering tricks and then accessed the system. The attacker could then mess with how transactions were verified.
KelpDAO says this matters because it shows the problem was not just their configuration, the breach of LayerZero’s security played a big role.
A Dispute Over Security Responsibility
All of this turned into a public argument after the attack. LayerZero blamed the problem on KelpDAO’s setup, stressing it was a one verifier system. KelpDAO pushed back, saying they were not really told how risky that setup was.
These same points now show up in KelpDAO’s formal claim. The DAO argues that LayerZero should have flagged the risks and supported their own defenses.
After the hack, KelpDAO started moving rsETH to a security standard that they believe is safer. They said this upgrade was about protecting users and their funds.
So, the lawsuit combines two issues: what exactly let the attackers in, and who should pay for the damage. KelpDAO wants LayerZero and Pellegrino held responsible, but Pellegrino rejected the claims and said that he will argue his case in Vancouver.
Now, instead of debating in public or in technical forums, the dispute moves to the Canadian courts. There, judges will get to examine KelpDAO’s allegations and LayerZero and Pellegrino’s responses legally.
