KelpDAO sues LayerZero, claims it endorsed setup used in $292 million rsETH exploit

What happened

KelpDAO filed a lawsuit against LayerZero and Bryan Pellegrino over the April 18 rsETH exploit. KelpDAO claims LayerZero endorsed in writing the bridge setup that was used in the exploit, which involved $292 million.

Confirmed

Global impact / market context

This lawsuit could make bridge providers legally responsible for security setups they approve. If courts agree, bridge operators may face higher legal costs and stricter reviews, which could slow new cross-chain products and raise fees for users.

Analyst inference

The case highlights legal risk in cross-chain bridges, which means systems that move assets between blockchains. A ruling against LayerZero could push investors to favor bridges with clearer audits and insurance, affecting token prices and project funding.

Analyst inference

What to watch

1. Track whether the court accepts KelpDAO's written endorsement claim against LayerZero and Bryan Pellegrino, because that decision shapes legal responsibility for bridge approvals. Confirmed
2. Watch for LayerZero's formal response or any proposed settlement, which could reveal its defense and whether it changes the disputed bridge setup. Proposed
3. Monitor GAL token trading and any new bridge security standards, since investors may reprice cross-chain assets if the lawsuit expands liability. Analyst inference

Affected assets

• GAL — GAL (migrated to Gravity - G)

Evidence

• theblock.co