‘We Messed Up’: Gala Games Secures $240 Million worth of Tokens Through Exploit

The value of the Gala Games (Gala) token rose on Monday after an attacker issued 5 billion tokens in the Gala smart contract, with an estimated $240 million worth of tokens slipped during the exploit.

Ultimately, the attacker was able to sell 600 million tokens on the decentralized exchange Uniswap, or at the time of the exploit, worth around $29 million. The price fell 20% in less than an hour between sales, dropping from $0.048 to $0.038.

Anonymous smart contract developer and security auditor 0xQuit tweeted: “A hacked or fraudulent Gala Games admin address has been found with $5 billion Gala ($200M) and has been selling the tokens for the past 2 hours.

Two hours after the hack was discovered, Gala CEO Eric “Benefactor” Schiermeyer released an update to Gala's Discord server confirming the exploit and explaining the situation.

“We identified the agreement and within 45 minutes we confirmed and removed the unauthorized access to the GALA contract,” Schiermeyer wrote. “It's important to note that our ETH contract for $GALA is secure and under the protection of a multi-sig wallet. There was absolutely no negotiation.

A similar message was posted on the Gala Games Twitter account. Later, Gala said that the wallet in question was “freeze”. As a result, the remaining 4.4 billion unsold tokens are described in the original as “effectively burned”, meaning they cannot be transferred or accessed and are thus considered lost. The total supply of GALA includes 50 billion tokens.

“We messed up our internal controls…this shouldn't have happened and we're taking steps to make sure it doesn't happen again,” Schiermeier added. “We believe we have identified the perpetrator and are currently working with the FBI, DOJ and an international network of authorities.”

In a subsequent tweet, Gala Games described the attack as an “isolated incident”. Gala did not immediately respond to Decrypt's request for comment.

GALA has recovered to about $0.04272 as of this writing, making the token's price fairly flat over the past 24 hours. This is due to a market-wide rally that saw Ethereum itself rise 20% over the previous day, with the residual effects of the market swings seemingly offsetting the impact of the sell-off.

In the year In 2023, Schiermeier sued Gala co-founder Wright Thurston, the latter of whom stole $130 million in GALA tokens.

According to the indictment, GALA tokens were taken from the company's wallet and distributed across 43 wallets under Thurston's control to be sold between September 2022 and May 2023.

In a counterclaim, Thurston alleges that Schiermeier neglected to track down his inputs, which led to sales and waste when making transactions. [of] Millions of dollars in company assets.”

Edited by Andrew Hayward.