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Gala Games CEO admits fault in $240 million token exploit

source-logo  cryptobriefing.com 21 May 2024 03:59, UTC

Following the recent exploit that drained approximately $240 million worth of GALA tokens, Gala Games CEO Eric Schiermeyer responded with a statement, admitting to internal control failures and vowing to improve security measures. He also mentioned that the company has likely identified the perpetrator and is collaborating with the FBI, Department of Justice, and international authorities.

“We messed up our internal controls…This shouldn’t have happened and we are taking steps to ensure it doesn’t ever again. We believe we have identified the culprit and we are currently working with the FBI, DOJ and a network of international authorities,” Schiermeyer stated.

As reported by Crypto Briefing, an attacker gained unauthorized access to a Gala Games admin address on Monday. The attacker used this access to mint 5 billion new GALA tokens, worth around $200 million at the time, and then successfully sold 600 million newly minted tokens on the decentralized exchange Uniswap.

This sale led to a swift 20% drop in the token’s value, from approximately $0.048 to $0.038, according to data from CoinGecko. The security lapse allowed the attacker to profit from roughly $29 million.

The breach was initially flagged by 0xQuit, a smart contract developer and security auditor, on Twitter.

Gala Games said it took measures to freeze the compromised wallet, effectively rendering the remaining 4.4 billion tokens unsellable and “effectively burned.” Schiermeyer reassured stakeholders that the Ethereum contract for GALA was never at risk, being protected by a multi-signature wallet.

“It’s important to note our ETH contract for $GALA is secure and under the protection of a multi-sig wallet. It was never compromised,” he noted.

This isn’t the first time Gala Games has faced an exploit. The project reportedly lost $130 million in a similar incident in 2021.

Despite the turmoil, GALA’s price has recovered to around $0.04, influenced by a broader market upswing that saw Ethereum’s price increase by 20%.

Ethereum surged past $3,500 on Monday after Bloomberg ETF analysts Eric Balchunas and James Seyffart increased their odds of spot Ethereum ETF approval to 75%. Their previous odds were 25%.