Evercrest sues LayerZero and co-founder over $292M rsETH bridge exploit

Evercrest Technologies, the company behind KelpDAO, 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 an April bridge exploit that drained 116,500 rsETH, valued at about $292 million at the time. The claims include negligence, negligent misrepresentation, and defamation. The court has not established liability.

The core dispute: 1-of-1 security configuration

The exploit targeted a bridge connecting KelpDAO infrastructure with Unichain. KelpDAO alleges LayerZero reviewed and endorsed a configuration using a single Decentralized Verifier Network, creating a single point of failure, and later blamed KelpDAO for the design. These are allegations from Evercrest’s filing and have not been proven.

Broader implications for bridge security and liability

Cross-chain exploits are typically handled as technical incidents: fund tracing, vulnerability patches, and configuration disputes. This case introduces potential legal responsibility for infrastructure providers that review or recommend security setups used by third-party applications. Courts may need to determine the duty of care and liability boundaries when interoperability systems involve shared software and trust assumptions. The outcome could affect how protocols allocate risk and document security reviews across the ecosystem.

The lawsuit initiates the legal process. The exploit occurred in April, and responsibility is now moving into the courts.

This article was written by the News Desk and edited by Samuel Rae.