Gala Games CEO Eric Schiermeyer has confirmed that a "security incident" led to the unauthorized sale of 600 million GALA tokens, worth approximately $23 million. The breach, which Schiermeyer attributed to "messed up" internal controls, has raised significant concerns within the blockchain gaming community.
Incident Overview
On May 20, at 7:32 pm UTC, blockchain observers reported the minting of 5 billion GALA tokens, valued at around $200 million at the time. The compromised wallet was selling the tokens in batches, leading to a sharp drop in GALA's price. The token hit a 24-hour low of $0.038, a 20% decrease from its daily high, before recovering slightly to $0.041, according to CoinGecko.
“We had an incident that resulted in the unauthorized sale of 600 million GALA tokens and the effective burn of 4.4 billion tokens,” Schiermeyer wrote in a May 20 post on X (formerly Twitter). He admitted, “We messed up our internal controls. This shouldn’t have happened, and we are taking steps to ensure it doesn’t happen again.”
Response and Mitigation
Gala Games quickly identified the compromise and revoked unauthorized access to the GALA contract. Schiermeyer assured users that the Ethereum contract was secure and had not been compromised. The company believes it has identified the person responsible and is collaborating with the FBI, the U.S. Justice Department, and international authorities to address the incident.
In a follow-up post on X, Gala Games announced that the security breach had been contained and the affected wallet frozen. However, details about the perpetrator and the method of access to the GALA contract remain undisclosed.
Ongoing Legal Disputes
This security incident occurs amid ongoing legal battles between Schiermeyer and Gala Games co-founder Wright Thurston. Both have filed lawsuits against each other, with Thurston accusing Schiermeyer of squandering millions in company assets, while Schiermeyer alleges that Thurston stole $130 million worth of GALA tokens.
Gala Games did not respond to requests for additional comments.
The incident underscores the critical need for robust internal controls and security measures in the cryptocurrency and blockchain industries, as companies continue to navigate complex technological and legal landscapes.
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