Did LayerZero lose the private key that allows the creation of stablecoins for the State of Wyoming?

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15 Sep 2026Hugh Bernard

LayerZero "did not ensure adequate control of a critical private key"

Information has been circulating within the crypto ecosystem for a few hours: has LayerZero lost control of a critical private key that allows for the creation of new units of the FRNT stablecoin, deployed since August 2025 by the U.S. State of Wyoming across several leading blockchains?

This seems to be confirmed by Keith Lawhorn, the cybersecurity officer of the Wyoming Stable Token Commission, the public body overseeing the FRNT stablecoin, in a post on social media platform X titled: "Why the Wyoming Stable Token Commission migrated FRNT from LayerZero to Chainlink CCIP".

A decision evidently made following what Keith Lawhorn describes as "a thorough review of the security posture and access control processes of LayerZero Labs following the $292 million hack in which North Korean-affiliated hackers compromised its infrastructure". And the outcome was evidently not conclusive...

We observed at LayerZero Labs a series of major failures in operational security, including a recent access control issue where the company did not transfer to the Commission an authorization used in production. During the resolution of this issue, it was also discovered that the company had not ensured adequate control of a critical private key used to manage an active FRNT deployment in production. Keith Lawhorn

Accusations rejected by LayerZero's CEO

In light of this situation deemed "outrageous" and conducted "in a biased manner", the co-founder and CEO of LayerZero Labs, Bryan Pellegrino, felt compelled to respond on social media platform X. This was an opportunity to remind that the State of Wyoming had requested that the FRNT stablecoin be deployed on Solana with "all initialized extensions". However, things apparently did not go as planned.

Indeed, Bryan Pellegrino explains that this "transfer of control of all relevant Token2022 extensions" did not involve the "Scaled UI Amount Authority", which was supposed to be included in the process. An oversight he acknowledges, explaining that it also escaped the attention of the Wyoming Stable Token Commission. However, he also noted that the situation was rectified within less than 24 hours after it was reported.

This extension is solely used to apply a scaling factor to the display of amounts in the user interface. It does not allow for the creation (minting) or burning of tokens, nor for freezing, seizing, suspending their operation, transferring funds, modifying the token supply, or changing gross balances. It has never been modified and its value has remained fixed at 1 throughout the relevant period. Bryan Pellegrino

The problem? This oversight would have involved a statement that the key allowing the use of this function had been lost. Completely false, according to LayerZero's CEO, who explains that "its transfer is visible on-chain and that less than 24 hours elapsed between the request and the confirmation of the transfer".

Nevertheless, Wyoming is now operating with Chainlink, just like the cryptocurrency exchange platform Kraken, which also abandoned LayerZero last May following the $292 million hack of the Kelp protocol, involving a flaw in its infrastructure.

Source: Keith Lawhorn

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