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According to recent news reports, the co-founders of Gala Games are embroiled in a controversial legal battle over an alleged $130 million crypto theft.
According to a detailed complaint filed by verified shareholders, Eric Schiermeyer, Wright Thurston and their investment company, True North United Investments, LLC, are accused of stealing 8,645,014,077 GALA tokens from the company. See below for full details.
Crypto news: Gala co-founders threaten platform’s future
As mentioned above, the co-founders of Gala Games, a blockchain-based gaming platform, Eric Schiermeyer and Wright Thurston, have taken legal action against each other.
Both lawsuits were filed in a Utah district court on 31 August, with both parties accusing the other of serious misconduct.
Schiermeyer, who also serves as CEO of Gala Games, filed a lawsuit accusing Thurston and his investment company, True North United Investments, of misappropriating approximately $130 million in GALA tokens.
According to the lawsuit, the tokens were initially transferred to a portfolio controlled by the company, but were later moved by Thurston to 43 other portfolios. The tokens were then sold or traded through a “complex web of obfuscated transactions” between September 2022 and May 2023, Schiermeyer claims.
Thurston, who initially claimed to be the safe keeper of the GALA tokens, later changed his story and claimed that the tokens sold were his property, a claim that Schiermeyer’s lawsuit rejects.
In particular, Thurston is accused of misappropriating licences to operate nodes in the GALA ecosystem, licences that allow him to earn GALA tokens. According to the complaint, Thurston allegedly sold these licences and retained the proceeds.
Thurston’s charges against Schiermeyer
On the same day, Thurston’s investment firm, True North, filed a lawsuit alleging that Schiermeyer had squandered millions of company assets and diverted company funds for personal use.
The complaint alleges that Schiermeyer created Gala Games subsidiaries in Switzerland and Dubai and became the majority shareholder in order to pursue business opportunities without Thurston’s involvement.
In addition, the complaint alleges that Schiermeyer provided Thurston with incomplete or inaccurate business records despite his repeated requests.
Both lawsuits seek mutual removal as directors of Gala Games and various forms of relief and compensation.
Schiermeyer’s lawsuit seeks the return of the allegedly stolen GALA tokens, while Thurston’s lawsuit seeks at least $750 million in various damages and compensation.
This legal conflict follows an earlier lawsuit in March in which the US Securities and Exchange Commission (SEC) sued Thurston, True North and another company he founded, Green United, for allegedly selling investments in an allegedly fraudulent crypto mining scheme.
These lawsuits raise fundamental questions about the governance and financial management of Gala Games, as both co-founders are now implicated in allegations that, if proven in court, could have serious implications for the company’s future.
Brief focus on the price of the GALA token
As a result of the above, the GALA token is, as might be expected, in the midst of a severe downturn. Specifically, the value of GALA was trading at $0.01669, down 10% over the last 24 hours.
It has also fallen 28% over the past 30 days.
We note that at a time when the Web 3.0 ecosystem is trying to work together to confront the US Securities and Exchange Commission (SEC) in a broader attempt to establish comprehensive regulation for the industry, this case appears to be unique.
The disagreements within the Gala Games team highlight a problem the company has faced with the regulator before, most notably in relation to Thurston and True North’s Green Boxes crypto initiative.
This case brought to light all of Thurston’s previous cryptographic initiatives, most of which had been controversial in the past, setting a precedent for his involvement in litigation even before the Gala Games case.