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Web3 gaming firm Gala Games (GALA) plunged more than 5% after an apparent exploit worth about $206 million identified by on-chain sleuth Etherscan.
Someone minted 5 billion GALA tokens on May 20, Etherscan said, triggering a 15% plunge in the GALA price to $0.0397. It has since pared losses to trade at $0.04136 as of 5:20 a.m. EST.
The incident has been contained and impacted wallets were frozen, the project said in a May 21 post on X. It added that it is “working closely with law enforcement to investigate the individuals behind the breach.”
The security incident involving the $GALA token has been contained and the impacted wallet has been frozen.
This was an isolated incident, the cause of which has been addressed and we are working closely with law enforcement to investigate the individuals behind the breach.…
— Gala Games (@GoGalaGames) May 21, 2024
History Repeats Itself As Gala Games Hit With Another Multi-Million Dollar Exploit
This is not the first exploit that Gala Games has suffered, with the project losing about 8.65 billion GALA tokens worth $130 million at the start of 2021. One of the firm’s co-founders, Eric Schiermeyer, went on to sue the other co-founder, Wright Thurston, for his alleged involvement in the incident.
When Thurston was confronted, he “falsely stated that he simply intended to hold the GALA in secure wallets for the benefit of Gala Games,” according to an August 2023 lawsuit.
“He was able to exchange, hide or sell approximately $130 million worth of the stolen GALA tokens before Gala Games could stop him,” the lawsuit alleged. Thurston subsequently “enriched himself through his pattern of deception,” it added.
Thurston Counters With A Lawsuit Of His Own
Thurston responded to Schiermeyer’s accusations with a lawsuit of his own on the same day. He claimed that Schiermeyer used company funds for personal use.
In March 2023, the US Securities and Exchange Commission (SEC) also sued Thurston, along with one of his other companies. The SEC accused him and the company of selling unregistered securities worth $18 million in the form of GREEN, a crypto linked to a public global decentralized power grid.
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