Gala Games lost over $200 million as a result of an exploit

The CEO of Gala Games confirmed that there was a “security incident” that resulted in the unauthorized withdrawal of 5 billion GALA tokens. The attacker was able to sell them through the decentralized exchange Uniswap, against which background the price of the asset fell by about 20% in less than an hour.

Source: Etherscan

Gala Games CEO Eric Schiermeyer said a recent smart contract “security incident” in which a hacker was able to steal and sell $23 million worth of GALA tokens was due to “flawed” internal control systems.

On May 20, blockchain observers recorded the release of 5 billion GALA tokens worth over $200 million. These tokens were gradually sold in batches by the wallet associated with the incident.

Reports of the hack sent GALA's price plummeting to a 24-hour low of $0.038, down 20% from its daily high recorded just an hour earlier. According to CoinGecko, the token recovered slightly and reached $0.043.

Source: CoinGecko

“We experienced an incident that resulted in the unauthorized sale of 600 million GALA tokens and the burning of 4.4 billion tokens,” Gala Games co-founder and CEO Eric Schiermeyer wrote in a May 20 post on Platform X.
Schiermeyer said that Gala Games "discovered the exploit" and fixed the "unauthorized access to the GALA smart contract." He emphasized that the Ethereum contract “remains secure” and “has never been compromised.”

Gala Games believes it has identified the culprit and is cooperating with the FBI, the US Department of Justice and “a network of international authorities,” Schiermeyer wrote.

In a post on Platform X, Gala Games added that “the security incident involving the GALA token has been contained and the affected wallet has been frozen.”

Gala Games and Eric Schiermeyer have not disclosed the identity of the person responsible for the incident or the methods by which this person gained access to the GALA smart contract. The company has not yet responded to requests for comment on the matter.

Recall that in August 2023, Eric Schiermeyer and his co-founder Wright Thurston filed lawsuits against each other on behalf of Gala Games. Thurston accuses Schiermeyer of forcing Gala Games to "sell off and spend millions of dollars of company assets." In turn, Schiermeyer claims that Thurston stole $130 million worth of GALA tokens.
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