Gala Games Suffers Over $21 Million Loss in Smart Contract Exploit

Gala Games Suffers Over $21 Million Loss in Smart Contract Exploit
Photo by Pawel Czerwinski / Unsplash

On May 21, Gala Games faced a significant security breach when an unidentified attacker gained access to its smart contracts and issued 5 billion GALA tokens, leading to a substantial financial setback for the company. The attack resulted in the unauthorized exchange of 592 million GALA tokens for 5,952 ETH, valued at approximately $21.8 million at the time of the incident.

The exploit was first detected by analysts at Lookonchain, who noticed unusual activity in the network around 10:32 PM UTC+3 on May 21, 2024. Following the discovery, Gala Games confirmed the compromise and took swift action to block further unauthorized transactions by locking down the affected assets.

Eric Schiermeyer, co-founder and CEO of Gala Games, addressed the security incident, stating, "We experienced an incident that led to the unauthorized sale of 600 million GALA and the effective burning of 4.4 billion tokens. It’s important to note that our Ethereum smart contract for GALA remains secure and is well-protected with a multi-signature wallet."

In response to the breach, the Gala Games team has been collaborating with law enforcement agencies including the FBI and the Department of Justice to track down the perpetrator, whose identity has been established, according to Schiermeyer. However, the specifics of the exploit and the method by which the hacker gained access to the smart contracts have not been disclosed by the team.

The news of the hack initially caused the price of GALA to drop from $0.048 to $0.037. Nevertheless, after the team reassured the community about the security of their funds, the token’s price began to recover and was trading around $0.042 at the time of writing, according to data from TradingView.

This incident adds to a series of challenges faced by Gala Games. In September 2023, Schiermeyer filed a lawsuit against co-founder Wright Thurston, who allegedly stole 8.6 billion GALA tokens in 2021, which were later sold for $130 million. Additionally, in March, Gala Games accused the provider pNetwork of negligence that led to a previous hack and subsequent devaluation of the GALA token in November 2023.

The ongoing issues highlight the vulnerabilities and challenges within the cryptocurrency and blockchain industries, emphasizing the need for enhanced security measures and robust protocols to protect digital assets.