Key Takeaways:
- Gala Games suffered a security breach on May 20, leading to the unauthorized sale of 600 million GALA tokens valued at $23 million, caused by flawed internal controls.
- The breach resulted in a 20% drop in GALA’s price, but it later recovered slightly; the incident has led to internal conflicts and lawsuits between company founders.
- CEO Eric Schiermeyer confirmed the incident and stated that measures have been taken to secure the system, with assistance from FBI and other authorities.
On May 20, Gala Games experienced a significant security breach, leading to the unauthorized sale of 600 million GALA tokens, valued at $23 million.
The breach, attributed to flawed internal controls, allowed a hacker to exploit a vulnerability in Gala’s smart contract.
The security incident involving the $GALA token has been contained and the impacted wallet has been frozen.
— Gala Games (@GoGalaGames) May 21, 2024
This was an isolated incident, the cause of which has been addressed and we are working closely with law enforcement to investigate the individuals behind the breach.…
The incident was noticed by blockchain observers at 7:32 pm UTC when 5 billion GALA tokens, valued at approximately $200 million, were minted.
The hacker sold the tokens in batches, causing GALA’s price to plummet to a 24-hour low of $0.038, a 20% decline from its peak just an hour earlier.
The price later recovered slightly to $0.041, according to CoinGecko.
Hey Everyone…
— benefactor (@Benefactor0101) May 20, 2024
I always knew there was a reason I never talk shit about other projects getting hacked…I'm sorry to say we had an incident that resulted in the unauthorized SALE of 600million (21million usd) $GALA tokens and the effective BURN of 4.4 billion tokens.
We…
CEO Eric Schiermeyer confirmed the incident in a post on X, acknowledging the internal control failure and the unauthorized sale of tokens.
He also mentioned that 4.4 billion tokens were effectively burned as part of the response.
Schiermeyer assured that Gala Games has identified the compromise, revoked unauthorized access to the GALA contract, and that their Ethereum contract remains secure and was never compromised.
Web3 gaming platform Gala Games loses over $200 million in potential exploit, GALA plummets 15% https://t.co/7NUYVs8HS9
— The Block (@TheBlock__) May 20, 2024
Gala Games is cooperating with the FBI, the U.S. Justice Department, and international authorities to address the breach.
The identity of the person responsible for the breach has been identified, but neither Gala Games nor Schiermeyer have disclosed the individual’s identity or the method used to gain access to the GALA contract.
The affected wallet has been frozen, and the security incident has been contained.
🚨Gala Games loses over $200 million in potential exploit.
— Elja (@Eljaboom) May 21, 2024
Gala Games suffered an exploit, with someone minting 5 billion GALA tokens worth around $206 million.
After I bought $Gala and got replaced without my permission with $Pgala that is worth 0. I lost faith in them. pic.twitter.com/ETMBgoFjcs
In a related development, internal conflicts have surfaced within Gala Games.
In August, Schiermeyer and co-founder Wright Thurston filed lawsuits against each other.
Thurston accused Schiermeyer of wasting millions of dollars in company assets, while Schiermeyer alleged that Thurston stole $130 million worth of GALA tokens.
These legal disputes add to the turmoil within the company following the security breach.
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