Gala Games CEO pleads guilty to $240 million in token abuse
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Following the latest exploit that drained nearly $240 million worth of GALA tokens, Gala Games CEO Eric Schiermeier responded in a statement, acknowledging internal control failures and pledging to improve security measures. He also mentioned that the company did not identify the perpetrators of the crime and cooperated with the FBI, Department of Justice and international authorities.
“We messed up our internal controls…this shouldn't have happened and we're taking steps to make sure it doesn't happen again. We believe we have identified the perpetrator and are currently working with the FBI, DOJ and a network of international authorities,” Schiermeier said.
As reported by Crypto Briefing, an attacker gained unauthorized access to the administrator account of Gala Games on Monday. The attacker used this access to 5 billion new GALA tokens worth around $200 million at the time and successfully sold 600 million newly minted tokens on the decentralized exchange Uniswap.
According to data from CoinGecko, this sale resulted in a rapid 20% drop in the value of the token. The security flaw allowed the attacker to make a profit of about $29 million.
The breach was first pointed out on Twitter by 0xQuit, a smart contract developer and security auditor.
Gala Games said it had taken steps to freeze the compromised wallet, preventing the remaining 4.4 billion tokens from being sold and “effectively burning them.” Schiermeier assured stakeholders that Ethereum contracts will never be compromised for GALA, secured by a multi-signature wallet.
“It's important to note that our ETH contract for $GALA is secure and under the protection of a multi-sig wallet. It was never touched,” he said.
This is not the first time the Gala Games have faced exploitation. The project In 2021, $130 million is reported to have been lost in the same situation.
Despite the turmoil, the price of GALA has returned to $0.04, with the Ethereum price rising by 20% due to the impact of the broader market improvement.
Ethereum surpassed $3,500 on Monday after Bloomberg ETF analysts Eric Balchunas and James Seifert raised their position probability to 75%. Their previous probability was 25 percent.
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