Gala Games CEO admits fault in $240 million token exploit

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%.