KelpDAO has filed a lawsuit against LayerZero and the protocol's co-founder, Bryan Pellegrino, alleging that security failures were responsible for the rsETH bridge exploit that occurred earlier this year.

The lawsuit puts the question of responsibility for the incident at the center of a legal dispute between projects operating within the crypto ecosystem. KelpDAO's focus on the security arrangements surrounding the infrastructure used to bridge rsETH.

At this stage, the claims should be treated as allegations made by KelpDAO rather than established findings. The filing of a lawsuit does not by itself determine whether LayerZero or Pellegrino bears any legal responsibility for the exploit.

rsETH Bridge Exploit Becomes Legal Dispute

The KelpDAO LayerZero lawsuit highlights the kinds of legal questions that can emerge after a crypto bridge suffers a security incident. Blockchain bridges allow assets or information to move between different networks. Because they connect separate blockchain environments, their security can involve multiple protocols, smart contracts and infrastructure providers at once. That shared structure also means the fallout from an incident can extend beyond a technical post-mortem and into contractual and legal territory, as this case illustrates.

When an exploit occurs, determining responsibility can therefore become complicated. Investigations may need to examine which systems were affected, how the attacker gained access and whether any party failed to meet its technical or contractual responsibilities.

KelpDAO is now seeking to address those questions through the courts, alleging in its complaint that LayerZero's security failures were responsible for the rsETH incident.

News of the filing was circulated on September 25, 2026, by Cointelegraph on X:

JUST IN: KelpDAO sues LayerZero and co-founder Bryan Pellegrino, alleging their security failures caused this year's rsETH bridge exploit. pic.twitter.com/H5Ox8DYyMx
— Cointelegraph (@Cointelegraph) September 25, 2026

What Comes Next in the KelpDAO LayerZero Lawsuit

The case could also bring greater attention to the question of how responsibility is divided among crypto projects when shared cross-chain infrastructure is compromised. Because bridge exploits have been a recurring problem across the industry, how courts treat disputes over shared infrastructure is of interest well beyond the parties directly involved.

Further court filings may provide more detail about KelpDAO's allegations, the damages it is seeking and the specific security failures it claims led to the exploit. LayerZero and Pellegrino will also have the opportunity to respond to the allegations through the legal process. Civil cases of this kind can extend over months or longer, with early procedural stages typically preceding any examination of the underlying claims. Until the dispute develops further, any conclusions about responsibility would be premature.

For now, the key development is that the rsETH bridge exploit has moved beyond a technical security incident and into a legal battle, with KelpDAO pursuing claims against LayerZero and its co-founder.