Gala CEO Blames internal controls for $23 million exploit

Gala Games experienced a significant security breach resulting in the unauthorised minting and sale of $23 million worth of GALA tokens. On May 20 at 7:32 pm UTC, blockchain observers noticed the creation of 5 billion GALA tokens, valued at approximately $200 million at the time. 

The responsible wallet sold these tokens in batches, causing GALA's value to drop to $0.038, a 20% decrease from its daily high.

Internal measures to blame

Gala Games’ co-founder and CEO, Eric Schiermeyer, acknowledged the incident in a May 20 post on X, admitting that internal control failures were to blame. He confirmed the unauthorized sale of 600 million GALA tokens and the burning of 4.4 billion tokens. 

Schiemeyer wrote:

Schiermeyer assured that the Ethereum contract was secure and that unauthorised access to the GALA contract had been removed.

Gala Games believes it has identified the individual responsible for the breach and is collaborating with the FBI, the United States Justice Department, and international authorities. The security incident was later contained, and the impacted wallet was frozen.

Team responds swiftly, reimbursement underway

In response to the breach, Gala Games noted in announcement that it has contacted US Federal law enforcement agencies, and is working with the authorities to take legal action against the culprits.

The team further added that users who had been affected by the hefty transaction fees related with the incident would be reimbursed.

The announcement further stated:

Gala Games has a history of security issues. In early 2021, the platform lost $130 million due to an exploit that affected approximately 8.65 billion GALA tokens. This incident led to legal disputes among co-founders Schiermeyer and Wright Thurston, further complicating recovery efforts and affecting investor confidence.

Schiermeyer and Thurston filed lawsuits against each other in August. Thurston accused Schiermeyer of causing Gala Games to "sell off and waste millions of dollars in company assets," while Schiermeyer accused Thurston of stealing $130 million worth of GALA.