Web3 gaming platform Gala Games loses over $200 million in potential exploit, GALA plummets 15%

Gala Games, a web3 gaming firm, appears to have suffered an exploit Monday, with someone minting 5 billion GALA -0.77% tokens worth around $206 million, according to the blockchain explorer Etherscan . 

Following the incident, GALA , the platform's native token, plummeted nearly 15% from $0.0467 at 3:00 p.m. ET (19:00 UTC) to $0.0397 at around 5:25 p.m. ET (21:25 UTC) on May 20, based on data from The Block's price page for the token.

Overall, the token's price fell 5.77% within the past day. GALA maintains a $1.7 billion market capitalization with a circulating supply of 40.6 billion. 

The situation is developing, and The Block contacted Gala Games for comment. 

Previous Gala Games exploit

In early 2021, Gala Games lost $130 million after around 8.65 billion GALA tokens were stolen. Eric Schiermeyer, one of the firm's co-founders, sued Wright Thurston, the other co-founder, for allegedly participating in the hack. 

"When confronted about his theft of company GALA, Thurston falsely stated that he simply intended to hold the GALA in secure wallets for the benefit of Gala Games,” according to the August 2023 lawsuit. "However, last year Thurston and/or [his company] began moving the stolen tokens from those wallets and exchanging or selling them in a complex web of obfuscatory transactions. He was able to exchange, hide or sell approximately $130 million worth of the stolen GALA tokens before Gala Games could stop him." Schiermeyer added elsewhere in the complaint that Thurston "has enriched himself through his
pattern of deception."

Thurston then issued his own lawsuit against Schiermeyer claiming that he used company funds for personal use, The Block previously reported . 

The United States Securities and Exchange Commission also sued Thurston and another of these companies in March 2023 for allegedly selling $18 million worth of unregistered securities in the form of GREEN, a cryptocurrency related to a public global decentralized power grid. 

Schiermeyer, the firm's co-founder, also co-founded the mobile gaming firm Zynga. Gala Games has a third co-founder, Michael McCarthy, who formerly served as a creative director at Zynga.