cryptoslate.com
The co-founders behind the blockchain firm Gala Games have initiated legal proceedings against each other, according to recent court filings.
First case concerns alleged $130M theft
The first case, which Gala co-founder Eric Schiermeyer filed on Aug. 31, alleges wrongdoing on the part of another co-founder, Wright Thurston. The case additionally names Thurston’s investment vehicle, True North United Investments, as a defendant.
Schiermeyer alleges that Thurston stole more than 8.6 billion GALA tokens from company wallets. Despite claiming that he held those tokens securely for Gala Games, Thurston allegedly sold some or all of those tokens and gained $130 million as a result.
According to the complaint, Thurston also allegedly stole Gala node licenses, which are used to earn GALA tokens, and sold those licenses for profits. He faces other investor lawsuits over this issue.
Through the current lawsuit, Schiermeyer intends to seek restitution for the allegedly stolen funds as well as compensation for damage. Schiermeyer also aims to have Thurston removed from his role as director at Gala Games — noting that Thurston has no daily role at the company and is an absentee director.
Incidentally, Schiermeyer’s lawsuit claims that Thurston has operated numerous other failed companies. It notes that the U.S. Security and Exchange Commission recently sued Thurston over a company called Green United. The SEC’s own statements suggest this company raised $18 million in crypto-mining offers; it also labels Thurston as a “recidivist [i.e., reoffending] salesperson for fraud and registration violations.”
Second case concerns $600M of waste
Thurston filed his own case against Schiermeyer on Aug. 31. That filing alleges that Schiermeyer misused Gala Games’ assets and funds without board approval — a practice that is otherwise known as corporate waste.
Schiermeyer supposedly burned or destroyed about $600 million of GALA tokens and shareholder assets. He also allegedly lent millions of dollars to himself through another company involved in Gala Games, Blockchain Game Partners.
Furthermore, Schiermeyer allegedly set up international firms that were related to Gala Games. At those firms, he acted as the controlling shareholder in spite of Blockchain Game Partners’ right to pursue those business opportunities.
Schiermeyer also harmed True North and Blockchain Game Partners in various other ways involving the communication of information, according to the filing. Schiermeyer’s “malfeasance, mismanagement, and self-dealing” supposedly led to harm.
Thurston aims to obtain damages above $600 million, to be determined at trial. He also aims to have Schiermeyer removed from his lead roles at Gala Games.
GALA token takes hit
Gala Games is a platform that provides access to various NFT-based games and cryptocurrency rewards. It also has music and film services. The firm is partially responsible for VOXverse, a metaverse project from “The Sims” creator Will Wright.
Gala Games maintains a reasonably high profile: its token, GALA, is currently the 86th largest cryptocurrency by market cap, boasting a total supply of $410.6 million.
Despite its high standing, a price drop has coincided with the legal controversy. GALA is down 18.5% over the week ending Sept. 4. By comparison, Bitcoin was largely stable during that time and lost just 1.3% during the same period.