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Gala Games, the company behind the GameFi project, said on March 20 that it had filed a lawsuit against pNetwork, seeking $28 million in damages on behalf of pGALA hacking victims.
The gaming company claims that pNetwork failed to resolve a code misconfiguration, providing the misleading impression of a $1 billion hack and unfairly causing a disruption in the market for Gala’s own native token, GALA, and necessitating significant expense for the gaming project as a result.
The hack allegedly occurred in November 2022 as a result of a compromised private key. According to reports, the vulnerability may have been caused by a plain text private key breach in one of three pNetwork-affiliated Gala smart contracts.
Unfortunately, Gala Games was eventually hacked when a scammer gained access to the wallet, and an unauthorized wallet address minted over $2 billion in GALA tokens and dumped them on PancakeSwap. As a result, the value of GALA tokens fell dramatically, and the liquidity pool was depleted by $4.5 million.
Gala Games Demands Almost $28 Million in Damages
In a recent Twitter statement, pNetwork expressed displeasure at Gala’s most recent action and made it clear that they had previously given Swiss authorities a comprehensive report on the entire event.
1/4 We would like to express our genuine surprise & concern upon hearing the recent announcement by GALA Games to sue pNetwork. We would like to clarify that, three months ago, we had already submitted a comprehensive report to the Swiss authorities detailing the entire incident.
— pNetwork 🦜 (@pNetworkDeFi) March 20, 2023
The development team reportedly found a “misconfiguration of the pNetwork-powered bridge for the GALA token,” according to a postmortem report released by pNetwork on November 5, 2022. As a result, ownership of the pGALA smart contract (deployed on BSC) was illegally taken over.
Gala further stated that while pNetwork had intended to repay any BNB assets acquired through the pool’s so-called “white-hat draining” as of November 5, 2022, the business had abandoned those intentions as of November 11, 2022.
In a Telegram chat, pNetwork asserted that the first phase of their recovery plan, which included GALA tokens, had been completed while the second phase, which involved BNB tokens, was on hold.
The Web3 Gaming company is now seeking over $27 million in damages, alleging the alleged breach cost the firm more than $25 million:
“Gala is seeking $27,671,934.80 for the out-of-pocket costs due to the breach, additional compensation for injuries, punitive damages, and other relief the court would deem just and equitable.”
If the lawsuit is successful, the firm has said that all damages, excluding legal fees, would be converted to GALA tokens and burned. Gala also urges any other persons impacted by the event to get in touch with the company’s legal representatives.