Kraken Shifts to Chainlink CCIP After Major Kelp Exploit

Crypto exchange Kraken announced that it will transition away from LayerZero and adopt Chainlink’s Cross-Chain Interoperability Protocol (CCIP) as the exclusive infrastructure for transferring its wrapped crypto assets across blockchains. The decision came after a major exploit involving the liquid restaking platform Kelp highlighted growing concerns surrounding older cross-chain bridge systems.

According to the exchange, Chainlink’s CCIP will now exclusively support transfers for wrapped assets such as kBTC, Kraken’s wrapped Bitcoin product. The company indicated that the migration is intended to strengthen the security and reliability of its multichain asset infrastructure amid increasing scrutiny over vulnerabilities in blockchain bridge technologies.

Kelp Exploit Triggered Industry Concerns

The move followed a major security incident in April, when Kelp suffered a loss of 116,500 rsETH through a bridge powered by LayerZero technology. The breach became the largest exploit of 2026 within the crypto sector and intensified discussions regarding the safety of legacy interoperability systems.

LayerZero later acknowledged that an error had occurred in the way its verifier network was configured to secure high-value assets. The company reportedly admitted that allowing its own verifier system to protect assets under that setup created a weakness that attackers were able to exploit.

The Kelp incident accelerated a broader industry migration toward newer cross-chain security frameworks, with an estimated $3 billion in total value locked reportedly moving to alternative infrastructure providers following the attack.

Several blockchain projects and protocols, including Solv and Re, have also shifted toward Chainlink’s CCIP in recent months as concerns around bridge security continued to rise.

Kraken Expands kBTC Ecosystem

Kraken explained that the migration to CCIP will initially support blockchain networks including Ethereum, Optimism, Ink, and Unichain, while additional chains are expected to be added later.

The exchange first launched kBTC in 2024 as a Bitcoin-backed token designed to maintain a 1:1 reserve ratio with Bitcoin holdings. Initially introduced on Ethereum and OP Mainnet, the token has since expanded its footprint within decentralized finance ecosystems.

Data from CoinGecko showed that kBTC currently holds a market capitalization of approximately $260 million.

Under the new arrangement, Chainlink CCIP will manage the movement of Kraken’s wrapped assets using the Cross-Chain Token standard, while Kraken will continue handling issuance and custody responsibilities.

Growing Adoption of Chainlink CCIP

Kraken’s decision reflects a broader industry trend favoring Chainlink’s interoperability solution for handling high-value blockchain transfers. Rival crypto exchange Coinbase previously selected CCIP as the exclusive bridge infrastructure for nearly $7 billion worth of wrapped assets last year.

The latest migration further strengthens Chainlink CCIP’s position as a preferred institutional-grade cross-chain solution as crypto firms seek stronger safeguards against increasingly sophisticated bridge exploits.

Meanwhile, Kraken’s parent company, Payward, recently applied for a federal trust charter in the United States as part of its effort to establish itself as a federally regulated crypto bank.

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