Key Highlights
- Cryptocurrency exchange Kraken transitions kBTC from LayerZero to Chainlink’s CCIP infrastructure
- Decision made following devastating $292 million security breach at Kelp DAO in April 2026
- More than $3 billion in total value locked has shifted from LayerZero to Chainlink recently
- Kraken becomes fourth major platform to abandon LayerZero post-attack, following Kelp, Solv, and Re protocols
- Coinbase previously made identical infrastructure transition for approximately $7 billion in wrapped assets
Leading cryptocurrency exchange Kraken has revealed plans to discontinue LayerZero as its cross-chain solution for kBTC, its wrapped Bitcoin offering, transitioning instead to Chainlink’s Cross-Chain Interoperability Protocol (CCIP).
LATEST: ⚡ Kraken has replaced LayerZero with Chainlink CCIP for its wrapped Bitcoin token after the $292M Kelp bridge exploit. pic.twitter.com/PhgnOjIor5
— CoinMarketCap (@CoinMarketCap) May 14, 2026
This strategic shift follows a devastating $292 million security breach at Kelp DAO that occurred in April 2026. Cybercriminals, suspected to have connections with North Korea’s notorious Lazarus Group, compromised Kelp’s LayerZero-based bridge infrastructure, which was operating with a single-verifier setup.
According to Kraken’s official statement, they selected Chainlink CCIP for its “enterprise-grade infrastructure with strict security and risk management requirements.”
Chainlink’s CCIP architecture mandates validation from 16 independent node operators for every cross-chain transaction. The protocol features built-in rate limiting mechanisms and maintains ISO 27001 and SOC 2 Type 2 security certifications.
Kraken introduced kBTC as a 1:1 bitcoin-collateralized token in 2024. Current metrics show approximately $260 million in market capitalization and around $333 million in total value locked, based on DeFiLlama data.
This infrastructure overhaul encompasses multiple blockchain networks such as Ethereum, Ink, Unichain, and Optimism, with additional networks planned. Chainlink will serve as the foundation for all upcoming Kraken wrapped asset products.
Growing Trend of LayerZero Abandonment
Kraken represents the fourth significant platform to discontinue LayerZero services following the Kelp security incident. Kelp DAO, Solv Protocol, and Re have all executed similar migrations. Combined, these three protocols account for approximately $2.57 billion in locked assets.
A representative from Chainlink verified that more than $3 billion in TVL has transitioned to their platform in recent weeks, including assets from Tydro, the primary lending application on Kraken’s Ink blockchain network.
LayerZero initially disputed responsibility for the Kelp security breach. While the company had previously advised Kelp to implement a more secure multi-signer framework, it subsequently acknowledged inadequate communication as a contributing factor.
Post-incident investigation revealed that 47% of applications utilizing LayerZero operated with single-verifier configurations, identical to the setup exploited during the Kelp incident.
LayerZero has announced it will discontinue support for 1/1 Decentralized Verifier Network setups and has initiated comprehensive security enhancements.
Sector-Wide Reaction
The decentralized finance sector mobilized the DeFi United initiative, raising more than $320 million to restore rsETH backing and provide restitution to impacted users.
Coinbase executed a comparable infrastructure migration previously, choosing Chainlink CCIP as its exclusive bridging solution for approximately $7 billion in wrapped digital assets.
Kraken’s parent organization, Payward, recently submitted an application for federal trust charter status to operate as a federally regulated cryptocurrency banking institution.
