Evercrest Technologies, the company that develops liquid restaking protocol Kelp DAO, has sued LayerZero Labs and its co-founder and CEO Bryan Pellegrino in the Supreme Court of British Columbia over the April exploit of rsETH’s LayerZero bridge. The notice of civil claim is dated Sept. 24, and Kelp published it late Thursday.

In its statement, Kelp said “the exploit was a direct result of LayerZero’s failures” and that LayerZero had “reviewed and endorsed” its deployment in writing.

The April 18 attack released 116,500 rsETH, worth about $292 million at the time, that was not backed by any deposits. LayerZero later linked the attack to North Korea’s Lazarus Group. The claim alleges negligent misrepresentation, negligence and defamation and seeks damages, including aggravated and punitive damages on the defamation claim. It names no figure, but says the exploit and LayerZero’s public statements have inflicted “tens of millions of dollars of damages” on Evercrest.

What Kelp Alleges

The case turns on how the bridge was verified. LayerZero relies on Decentralized Verifier Networks, or DVNs, to confirm that tokens were locked or burned on one chain before matching tokens are minted on another. The Unichain bridge hit in April needed approval from just one DVN, run by LayerZero.

Evercrest says LayerZero backed that 1-of-1 setup in written messages in February 2024, March 2024 and January 2025, at one point telling it to copy the configuration of another single-verifier bridge. It also alleges LayerZero warned another developer, USDT0, about risks in its default configurations but never warned Kelp. LayerZero’s April 19 statement said it and others “previously communicated best practices around DVN diversification to KelpDAO.”

According to the filing, the breach started on March 6, when an attacker used social engineering to install malware on a LayerZero developer’s computer. The attacker then tampered with LayerZero’s RPC nodes and hit an outside RPC provider with a denial-of-service attack, so LayerZero’s DVN approved a forged message.

The Defamation Claim

Pellegrino is sued personally over posts on X and Telegram. The claim also targets that April 19 statement, in which LayerZero said on its blog that Kelp’s setup “directly contradicts the multi-DVN redundancy model that LayerZero has consistently recommended to all integration partners.”

Evercrest says users have pulled more than $650 million from Kelp since the exploit, at current ETH prices, and that it put up 2,000 ETH to help restore rsETH’s backing.

LayerZero’s Response

“The claim continues to be meritless, will meet them in Vancouver and defend myself accordingly,” Pellegrino wrote on X on Thursday.

LayerZero has maintained that Kelp first used multi-verifier defaults and moved to a single verifier on its own, a point the filing disputes. LayerZero’s May incident report said its DVN “will refuse to sign as the sole required attestor on any channel.” Kelp said in May it would move rsETH to Chainlink’s cross-chain protocol, and its latest statement says that migration is underway.

“We look forward to having our day in court,” Kelp said.

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