KelpDAO, through its legal entity Evercrest Technologies Inc., has filed a civil claim in the Supreme Court of British Columbia against LayerZero Labs Ltd., LayerZero Labs Canada Inc., and co-founder Bryan Pellegrino over the April exploit that drained 116,500 rsETH — roughly $292 million — from its LayerZero-connected bridge infrastructure. The filing alleges negligent misrepresentation, negligence and defamation and seeks aggravated and punitive damages, asserting that LayerZero reviewed and endorsed Kelp’s exact deployment and configuration in writing while later attributing the loss to Kelp’s single-verifier setup.
According to the complaint and incident reports, the breach began with malware placed on a LayerZero developer’s machine on March 6, followed by manipulation of LayerZero-operated RPC nodes that fed false blockchain data to its Decentralized Verifier Network (DVN). On April 18 a forged cross-chain message was accepted by the DVN after attackers disrupted external RPC providers, and Kelp’s Ethereum bridge minted 116,500 rsETH despite no corresponding lock or burn on the source chain. Kelp paused contracts roughly 46 minutes after the successful drain and blocked a second attempt to withdraw about 40,000 rsETH, a sum reported as roughly $95–100 million.
The legal dispute crystallizes months of public disagreement over responsibility. LayerZero’s May incident report concluded that the compromised LayerZero infrastructure allowed a single verifier to authenticate a false message and said it would end support for 1-of-1 DVN configurations in favor of multi-verifier setups. Independent researchers and firms such as Blockaid and Chainalysis documented how a LayerZero-operated verifier authenticated the forged packet and how attackers forced reliance on compromised internal RPC nodes by targeting external providers. LayerZero and some researchers attributed the intrusion to a North Korea-linked actor associated with Lazarus/TraderTraitor, while the civil claim centers on whether LayerZero’s written guidance and approval of Kelp’s deployment created or concealed the risk.
Evercrest’s filing also cites downstream losses and remediation: Kelp committed 2,000 ETH to the rsETH recovery effort, reported withdrawals exceeding $650 million since the exploit, and described market effects including a fall in the KERNEL token that drew regulatory and exchange warnings. Kelp began migrating rsETH bridging to Chainlink CCIP and completed a final tranche transfer (20,373.72 rsETH) by May 25 as part of restart and recovery work. Pellegrino has publicly called the lawsuit meritless and said he will defend himself in Vancouver. No court has yet resolved the allegations; the case will proceed under British Columbia’s civil rules, which set varying response deadlines depending on service location.