On April 18, the rsETH bridge accepted a cross-chain attestation for an event that had not actually happened. One message was enough to release 116,500 rsETH, worth roughly $292 million at the time.

Five months later, Evercrest Technologies has filed a notice of civil claim in the Supreme Court of British Columbia. Reports on the filing say the case names LayerZero Labs Ltd., LayerZero Labs Canada Inc. and Bryan Pellegrino and pleads negligence, negligent misrepresentation and defamation, among other claims for damages.

Those remain allegations. No court has found LayerZero, Pellegrino or KelpDAO legally responsible for the exploit.

The compromised component was not a Kelp smart contract

LayerZero's own final incident report provides a fairly detailed account of the intrusion. It says the operation began on March 6 when an attacker socially engineered a LayerZero Labs developer, obtained session material and moved into the company's RPC cloud environment.

The attacker poisoned internal RPC nodes so they could feed manipulated blockchain-state information to the LayerZero Labs DVN while returning apparently normal responses to monitoring systems. A denial-of-service attack against an external RPC provider then forced the signing service onto the compromised internal infrastructure.

The DVN produced a valid attestation for a forged cross-chain message. Because the Kelp bridge required only that DVN, the destination contract had no independent verifier whose disagreement could stop execution.

LayerZero says 116,500 rsETH were lost, approximately $292 million at the time. It also says the onchain LayerZero protocol itself was not compromised and that the incident did not spread to other applications.

Kelp's first public incident response made a compatible claim about the location of the breach: bridge-verification infrastructure operated outside Kelp's own domain had been compromised, while its mainnet rsETH contracts and underlying restaked assets remained intact.

What the companies disagree about is how the 1-of-1 setup got there

LayerZero's April statement framed the single-DVN configuration as the decisive avoidable weakness. It said a multi-DVN design was its recommended model and argued that Kelp had chosen a 1-of-1 arrangement despite guidance favoring redundancy.

Evercrest's lawsuit attacks that part of the history. According to reporting based on the claim, Evercrest says LayerZero reviewed Kelp's implementation before launch and gave written approval for the configuration. It alleges that LayerZero told the team in February 2024 there was no issue with using the default setup and later directed it toward a 1-of-1 arrangement using LayerZero's own verifier.

The claim further alleges that Kelp was not given the warning that LayerZero later said integrators should have understood. It also alleges that LayerZero separately warned another developer about default-verifier risk before the rsETH exploit.

Whether those communications say what Evercrest claims they say is now evidence for a court process rather than something that can be settled by another post on X.

LayerZero's own position became more nuanced after the first post-mortem

There is an important document between April's initial blame dispute and September's lawsuit. On May 8, LayerZero published what it called an overdue apology.

The company acknowledged that allowing its DVN to serve as the sole verifier for high-value transfers had been a mistake. It said it had failed to police what the DVN was securing and subsequently changed policy so the LayerZero Labs DVN would no longer participate as the only required attestor.

That admission is not equivalent to accepting Evercrest's legal allegations. LayerZero still maintains that applications control their own security configuration and that a 1-of-1 verifier design creates a single point of failure. Its later guidance recommends at least two independent parties and preferably three to five.

Both statements can therefore be true at the engineering level: LayerZero-operated infrastructure was compromised, and requiring a second independent verifier could have prevented that compromise from turning into a valid bridge message. The lawsuit is about the layer above that technical description — representations, duties, approval, warnings and responsibility between the companies.

The public blame after the attack is part of the case too

Evercrest is also challenging how LayerZero and Pellegrino described Kelp's role after the incident. Reporting on the complaint says the defamation claim concerns public statements that Kelp believes wrongly shifted responsibility onto its configuration.

Pellegrino rejects the filing and has described the claim as meritless, saying he intends to defend himself in Vancouver.

Meanwhile, Kelp has reduced rsETH's cross-chain footprint and created recovery procedures for holders on networks where bridging support was retired. LayerZero has hardened its own defaults, rebuilt the compromised operational environment and moved away from accepting single-verifier configurations through its DVN.

That makes the litigation relevant well beyond one protocol. Modern DeFi systems routinely split security across smart contracts, RPC infrastructure, oracle-like verification services, bridges and third-party middleware. The contracts at the final layer can execute exactly as written and still act on false information supplied upstream.

For the April exploit, the mechanical sequence is increasingly well documented. The harder part is assigning responsibility across that stack. A Canadian court is now being asked to do something a post-mortem cannot: decide what the parties legally owed each other before one compromised verifier was enough to move $292 million.