On May 21st, Gala Games faced a major security breach when its smart contract was exploited, resulting in the unauthorized minting of 5 billion GALA tokens, valued at $240 million. The attacker successfully exchanged $21 million worth of these tokens to ETH through Uniswap before Gala Games managed to freeze and burn the remaining tokens.

In this article, you will learn how Gala Games' smart contract was exploited, leading to the unauthorized minting of 5 billion GALA tokens. Gala Games CEO, Eric Schiermeyer, quickly addressed the incident. “We identified the compromise and within 45 minutes we secured and removed unauthorized access to the GALA contract. We messed up our internal controls… This shouldn’t have happened.”

Gala Games: Build Without Limits

Gala Games Exploit Partially Resolved

In a surprising twist, on May 22nd, the attacker returned the ETH. Gala Games announced that they would likely convert the returned ETH back to GALA tokens. Eric Schiermeyer confirmed on Gala’s Discord server, “We will probably buy and burn on GalaSwap.”

This incident is not the first time GALA tokens have been unexpectedly burned. In 2023, Gala Games faced controversy after announcing it would fork its GALA token and reissue it as GALA v2, followed by burning 42% of these new tokens. This action was taken to address what the company described as a “fundamental risk to the overall tokenomics of the project,” though it raised significant questions at the time.

Gala Games $GALA Token

Co-Founders File Lawsuit

The controversy deepened when it was revealed that Gala’s co-founders, Eric Schiermeyer and Wright Thurston, had filed lawsuits against each other involving hundreds of millions of dollars.

Schiermeyer accused Thurston of stealing and selling at least $130 million worth of GALA tokens, prompting the token fork and burn to render the allegedly stolen tokens worthless. Thurston’s counter-suit claimed Schiermeyer enriched himself at the expense of Gala Games and Thurston as a co-owner, citing Schiermeyer’s control over various assets.

Gala Games Logo

DWF Labs Buys 28 Million GALA Tokens

In response to the recent hack, web3 investor DWF Labs showed support for Gala Games by purchasing 28 million GALA tokens to help alleviate market selling pressures. DWF Labs has been under scrutiny recently, with Binance’s surveillance team alleging that it manipulated the price of YGG tokens and at least six other tokens, processing over $300 million in wash trades during 2023.