Evercrest Technologies, the developer behind liquid restaking protocol Kelp DAO, has sued LayerZero Labs and its co-founder and CEO Bryan Pellegrino in the Supreme Court of British Columbia, escalating a months-long blame dispute over the April exploit of the rsETH bridge into formal litigation. The notice of civil claim is dated September 24 and was published by Kelp late on Thursday. Kelp argues the roughly $292 million attack “was a direct result of LayerZero’s failures,” while LayerZero has maintained in its own post-incident statement that the loss came from Kelp’s single-verifier setup.
What the claim alleges
The filing pleads negligent misrepresentation, negligence and defamation, and seeks damages including aggravated and punitive damages, though it names no figure. Evercrest says LayerZero “reviewed and endorsed” the bridge deployment and configuration in writing before the attack, and that it warned another integrator about risks in its default setup but never gave Kelp the same warning. Kelp said it filed the case to “correct the record” and to hold LayerZero and Pellegrino accountable “for the harm they have caused us and the broader DeFi ecosystem.”
LayerZero’s response
Pellegrino pushed back within hours. “The claim continues to be meritless, will meet them in Vancouver and defend myself accordingly,” he wrote on X. LayerZero’s statement said the April 18 attack was isolated to Kelp’s rsETH configuration “as a direct consequence of their single-DVN setup,” a configuration it said “directly contradicts the multi-DVN redundancy model” the protocol recommends to integrators. The company attributed the breach to North Korea’s Lazarus Group and said attackers poisoned RPC infrastructure so its verifier confirmed a forged cross-chain message.
From exploit to court
The April 18 attack released 116,500 rsETH that was not backed by any deposits, worth about $292 million at the time. Kelp has said users withdrew more than $650 million in the aftermath and that it committed 2,000 ETH to restore the token’s backing. The protocol has spent the months since working to recover funds, most of which analysts have flagged as laundered and unrecoverable, and is migrating the rsETH bridge to Chainlink’s Cross-Chain Interoperability Protocol. No court has yet ruled on the allegations, and the case now moves through British Columbia’s standard civil process.
