Lombard shifts Bitcoin-backed assets to Chainlink CCIP after Kelp DAO exploit triggers $292M bridge losses

Lombard Finance has completed an internal security review and moved more than $1 billion in bitcoin-backed assets from LayerZero to Chainlink's Cross-Chain Interoperability Protocol (CCIP), CoinDesk reported. Under the arrangement, CCIP will become Lombard's exclusive cross-chain infrastructure for LBTC and BTC.b, two bitcoin-backed tokens widely used across decentralized finance. Lombard said the transition is part of a broader security upgrade as it seeks to expand bitcoin liquidity across multiple blockchain networks. The shift follows an April exploit tied to Kelp DAO that renewed scrutiny of cross-chain bridges. The incident led to about $292 million in losses through a LayerZero-based bridge. Since then, crypto firms and DeFi protocols have migrated or started migrating assets to CCIP, representing an estimated $4 billion in total value. Lombard said CCIP will replace LayerZero on Solana, Etherlink, Berachain, Corn, and TAC, and LayerZero will be fully deprecated on Morph and Swell. The migration also includes adopting Chainlink's cross-chain token standard, which supports a burn-and-mint model that allows a single standard token to move across different blockchains. Lombard said the setup reduces reliance on third parties and avoids vendor lock-in because the project retains ownership of its token contract. LBTC and BTC.b are designed to bring BTC liquidity to DeFi by enabling bitcoin exposure to move across smart-contract networks for trading, collateral use, and other on-chain activity. Lombard said the CCIP move is intended to protect users while supporting wider distribution of its bitcoin-backed assets. The protocol added that it has maintained zero security incidents and 100% uptime since launch and expects its cross-chain infrastructure to meet the same bar as it scales. Jacob Phillips, Lombard's co-founder, said the team reassessed its cross-chain systems after recent bridge security incidents and selected CCIP to secure LBTC and BTC.b. Chainlink Labs Chief Business Officer Johann Eid said Lombard's migration reflects a broader push toward cross-chain infrastructure with stronger security controls, as protocols seek reliability that can support institutional adoption and larger bitcoin-based DeFi markets. While LayerZero remains one of the largest cross-chain messaging providers, the Kelp DAO incident has prompted several protocols to revisit bridge dependencies and risk controls. Kelp DAO, Solv Protocol, Re, Kraken, and Lombard have migrated or announced plans to migrate to CCIP, with industry estimates placing the combined value near $4 billion. Kraken has said it will move kBTC and future Kraken Wrapped Assets to CCIP. Kelp DAO has also relaunched, and rsETH withdrawals are proceeding via bridge and claims as part of the recovery plan. Lombard pointed to CCIP's defense-in-depth design, independent node operators, built-in rate limiting, and audited infrastructure. Chainlink says each bridge lane is secured by at least 16 independently operated nodes that have undergone security reviews, and its rate-limiting acts as a circuit breaker during extreme events to restrict asset movement when unusual activity is detected. Lombard also cited Chainlink's institutional certifications, including SOC 2 Type 2 and ISO/IEC 27001:2022, as relevant as bitcoin-backed assets expand into larger DeFi and institutional markets. The migration will also let Lombard add its own security consortium as an additional verification layer for cross-chain transfers, enabling custom transfer rules, record-keeping for asset movements, and updates to verification logic as needed. Following the announcement, Chainlink's LINK token rebounded and was trading near $10.31, up 0.89% over the past 24 hours. LINK recently broke above a long-term downtrend line and has been consolidating between $10.03 and $10.80 as buyers test prior resistance levels.