Layerzero Discloses RPC Poisoning Incident Linked to $292M KelpDAO Hack
09 May 2026 · 15:30 UTC · Bitcoin.com RSS Feed · Original source
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Summary
Layerzero Labs disclosed that its internal infrastructure was compromised during the KelpDAO breach, involving both North Korean hackers (Lazarus Group) and a simultaneous DDoS attack. The RPC poisoning attack affected cross-chain communication protocols. Layerzero Labs issued an apology for maintaining silence for three weeks following the security breach before publicly disclosing the incident. The breach resulted in approximately $292M in losses tied to the KelpDAO hack.
Why it matters
The RPC poisoning attack represents a sophisticated, state-level threat to DeFi infrastructure. Layerzero's role as critical cross-chain communication layer means the breach affects multiple dependent protocols, amplifying systemic risk perception. The $292M quantified loss demonstrates real capital destruction, not theoretical vulnerability. Lazarus Group attribution signals ongoing geopolitical cyber threats targeting crypto ecosystems. The three-week disclosure lag compounds reputational damage and suggests initial impact underestimation. ALT assets show stronger negative impact (0.65-0.85 probability) because DeFi protocols and cross-chain tokens depend directly on bridge security. BTC shows lower correlation (0.25-0.55) due to macro factor dominance and safe-haven status. Short-term confidence is high (0.75-0.80) for ALT as selling pressure is acute; confidence decreases at weekly+ timeframes as narrative may shift toward recovery/fixes. Medium-term impact depends on: (1) technical remediation credibility, (2) insurance coverage, (3) regulatory response intensity, and (4) user migration patterns away from affected infrastructure.
Expected impact
The $292M KelpDAO hack involving Lazarus Group-attributed RPC poisoning of Layerzero Labs infrastructure triggers immediate broad market fear. Altcoin and DeFi-related assets face severe acute selling pressure as traders reassess risk exposure to cross-chain protocols and bridge infrastructure. The incident combines multiple negative catalysts: state-sponsored attribution, confirmed protocol-level compromise, substantial capital loss, and a three-week disclosure delay that undermines trust. Short-term volatility spikes sharply in the ALT segment as panic liquidations occur. Bitcoin experiences modest downward pressure from broader risk-off sentiment but benefits relatively from safe-haven rotation. The incident exposes critical vulnerabilities in decentralized infrastructure, prompting urgent security audits and potential regulatory scrutiny. Recovery trajectory depends on transparency of technical fixes, insurance/reimbursement mechanisms, and ecosystem confidence restoration.