GALA Token Breach: Weak Internal Controls Blamed for $23 Million Theft

'Messed up' internal controls are now being blamed for a security breach that recently saw a hacker steal and sell $23 million worth of the GALA token.

More specifically, on May 20 at 7:32 pm UTC, the creation of 5 billion GALA coins, worth $200 million back then, was flagged by blockchain analysts. The wallet has been offloading the coins over time.

The breach has caused GALA's price to fall by 20%, marking a 24-hour low of $0.038 according to CoinGecko. However, there has been a price recovery since then, and it currently trades at $0.041.

"We had an incident that resulted in the unauthorized SALE of 600 million […] GALA tokens and the effective BURN of 4.4 billion tokens," said Gala Games co-founder and CEO Eric Schiermeyer in a May 20 post on X (formerly Twitter).

He went on to say, "We messed our internal controls.".

"That is not something that should have happened, and we are doing everything we can so it doesn't happen again in the future."

Schiermeyer is on record to the effect that Gala found the compromise and had the unauthorized access to the GALA contract locked up.

He went on to reassure users that the Ethereum contract "is secure" and "was never compromised."

Schiermeyer said that Gala believed it knew the man behind this and was cooperating fully with the FBI, the U.S. Department of Justice, and many foreign governments.

In a subsequent post, Gala Games confirmed that "the security incident involving the GALA token has been contained and the affected wallet has been frozen back.

Neither Gala Games nor Schiermeyer have disclosed information regarding the unknown hacker and the way he got into the GALA contract.

No response from Gala Games was elicited after a request for comment was made concerning the incident. In later October, another development was that Schiermeyer and his partner Wright Thurston sued each other.

Thurston accused Schiermeyer of causing Gala to "sell off and waste millions of dollars in company assets," while Schiermeyer claims he stole $130 million worth of GALA tokens.