Gala Games Faces Internal Control Failure Leading To $200 mn Token Exploit
Gala Games, a blockchain gaming startup co-founded by Zynga’s Eric Schiermeyer, has suffered a significant security breach involving its GALA tokens.
The incident, which was revealed in an X post on May 21, resulted in a significant financial loss.
The attacker managed to mint 5 billion GALA tokens, valued at around $200 million, and sell 600 million of these tokens on the decentralized exchange Uniswap before Gala Games froze the compromised wallet, making the remaining 4.4 billion tokens unsellable and effectively burning them.
Initially, Gala Games did not announce the activity or provide any explanation on its Discord server, leading to fears of a hack.
Furthermore ,CEO Eric Schiermeyer admitted to internal control failures and admitted to working with the FBI, DOJ, and a network of international authorities to track down the exploiter.
The breach caused a sharp decline in the value of the GALA token, with its price dropping 20% and the attacker profiting approximately $29 million from the exploit.
(With inputs from Shikha Singh)
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