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Gala Games experienced a significant security breach resulting in the unauthorised minting and sale of $23 million worth of GALA tokens. On May 20 at 7:32 pm UTC, blockchain observers noticed the creation of 5 billion GALA tokens, valued at approximately $200 million at the time.Â
The responsible wallet sold these tokens in batches, causing GALA’s value to drop to $0.038, a 20% decrease from its daily high.
Internal measures to blame
Gala Games’ co-founder and CEO, Eric Schiermeyer, acknowledged the incident in a May 20 post on X, admitting that internal control failures were to blame. He confirmed the unauthorized sale of 600 million GALA tokens and the burning of 4.4 billion tokens.Â
“We messed up our internal controls. This shouldn’t have happened, and we are taking steps to ensure it doesn’t happen again,” Schiemeyer wrote.
Schiermeyer assured that the Ethereum contract was secure and that unauthorised access to the GALA contract had been removed.
Gala Games believes it has identified the individual responsible for the breach and is collaborating with the FBI, the United States Justice Department, and international authorities. The security incident was later contained, and the impacted wallet was frozen.
Migration to prevent further financial losses
In response to the breach, Gala Games urged all token holders to migrate to a new V2 contract immediately, as the V1 $GALA contract will expire at midnight UTC. This migration is crucial to prevent further financial losses.Â
Detailed steps for the migration process have been provided on the Gala Games’ official channels. Non-migration to the V2 contract could result in significant financial losses, as the V1 contract will no longer be operational.
Gala Games has a history of security issues. In early 2021, the platform lost $130 million due to an exploit that affected approximately 8.65 billion GALA tokens. This incident led to legal disputes among co-founders Schiermeyer and Wright Thurston, further complicating recovery efforts and affecting investor confidence.
Schiermeyer and Thurston filed lawsuits against each other in August. Thurston accused Schiermeyer of causing Gala Games to “sell off and waste millions of dollars in company assets,” while Schiermeyer accused Thurston of stealing $130 million worth of GALA.
The post Gala CEO Blames internal controls for $23 million exploit appeared first on Invezz
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