Gala Games CEO Eric Schiermeyer has admitted to significant internal control failures following a recent security breach that resulted in the theft of $23 million worth of GALA tokens.
On May 20 at 7:32 pm UTC, blockchain observers noted that 5 billion GALA tokens, valued at $200 million at the time, were minted. The hacker responsible managed to sell the tokens in batches, causing a sharp decline in GALA’s value.
Following the incident, GALA’s price plunged to a 24-hour low of $0.038, marking a 20% drop from its daily high just an hour earlier. However, it has since recovered 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 stated in a May 20 post on X (formerly Twitter).
“We messed up our internal controls. This shouldn’t have happened, and we are taking steps to ensure it doesn’t happen again.”
Schiermeyer assured stakeholders that Gala swiftly identified the breach and revoked the unauthorized access to the GALA contract.
He emphasized that the Ethereum contract remains secure and was not compromised during the incident. Gala has since frozen the impacted wallet and contained the breach.
The Gala Games team later announced that it had identified the perpetrator and is collaborating with the FBI, the United States Justice Department, and various international authorities.
However, Gala and Schiermeyer have not disclosed the individual responsible or the method used to gain access to the GALA contract.
The breach comes amid ongoing legal battles between Schiermeyer and Gala Games co-founder Wright Thurston. In August 2023, both founders filed lawsuits against each other.
Thurston accused Schiermeyer of mismanaging company assets, while Schiermeyer alleged that Thurston stole $130 million worth of GALA tokens.
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