[{"category":{"name":"BitScreener Exclusive","exported_url":"bitscreener-exclusive"},"id":"6eeb44e7-88d0-4c99-b097-2fccf6271282","updated_at":"2024-05-21T09:49:39.261615+00:00","account":{"firstName":"Marigold","lastName":"Vance"},"description":"Following the recent hack, Gala Games has recently regained control, frozen the affected wallets and worked with law enforcement agencies. Despite the company's reassurance, GALA token has been experiencing a significant drop in value.","sapo":"A hacker minted 5 billion GALA tokens with the swiped tokens worth around $240 million at the time of the exploit, then sold them on decentralized exchange Uniswap.","title":"Gala Games confirms $240 Million worth of tokens exploited: “Isolated incident” or history repeated?","content":"

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The past day has seen a drastic decrease in the Gala Games (GALA) token's value as a result of an exploit. A loss of $240 million was revealed.

The attack

The unknown attacker took advantage of the Gala smart contract to mint 5 billion tokens, with the swiped token valued at about $240 million at the time of the hack. Ultimately, the attacker successfully sold 600 million tokens - roughly $29 million at the time of the exploit - through the decentralized exchange Uniswap, an Ethereum-based decentralized exchange (DEX) that allows anyone to swap ERC20 tokens. Amid the selling, the price fell 20% in less than an hour, plummeting from roughly $0.048 to $0.038.

According to 0xquit - pseudonymous smart contract developer and security auditor on X, it is possible that the attacker used an admin address, speculating that either an external hacker or a rogue address owner could hold responsibility. He also concluded that before hitting a cap, the attacker could generate an additional 12 billion tokens, yet the compromised address is blacklisted, forcing the hacker to resort to another admin address before minting more tokens.

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Response from the firm

Gala Games representatives initially did not address the situation promptly nor did they give any brief explanation, sparking further panic among traders that the mass mint and sell was a hack. Not until nearly two hours after the hack was spotted did Gala CEO Eric Schiermeyer, known as “Benefactor” on X, posted an update to the Gala Discord server confirming the hack and explaining the situation. He stated that the company had detected and resolved the compromise within 45 minutes. Schiermeyer also acknowledged that the ETH contract for $GALA remained secure under the protection of a multi-sig wallet. “We messed up our internal controls...This shouldn't have happened and we are taking steps to ensure it doesn't ever again”, he added.

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Gala Games has been in contact with law enforcement agencies and international authorities regarding the incident, namely FBI, U.S. Department of Justice (DOJ), according to Schiermeyer, to find out the culprit of the breach. The firm also ensured its control over the incident, freezing the affected wallet. Following the drop in price to $0.039, GALA token's value has since rebounded and stabilized around $0.042, according to data from CoinGecko, which means the token's price virtually unchanged over the previous day. This is partly because of a general market upswing that has caused Ethereum's price to rise by 20% in the last day; the impact of the sales appears to have been neutralized by the market's leftover effects.

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Past incidents

As the investigation continues, the company promises to keep the public informed during the inquiry and take all required precautions to avoid future occurrences of this kind. The incident was a standalone event and the team has taken steps to ensure that such incidents do not recur. “A standalone event”, or “isolated incident”, according to the words of Gala Games. Nevertheless, this is not the first time history has witnessed such a security incident of the company.

Manager at MetaMask, one of the prominent members of the blockchain security community, Taylor Monahan, summarized Gala Games' past incidents in a series of posts, ironically asking why the project can still exist to this day. She even labeled the company as being an insane failure.

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Gala Games was previously exploited in a November 2021 incident, where $130 million was lost. In 2023, the company's founders got involved in a legal dispute as Eric Schiermeyer accused his fellow co-founder Wright Thurston of carrying out the theft. They even sued each other for mismanagement causing loss of 600 million USD in project assets.

In November 2022, the GALA token dropped by 30% in just a few hours because of a vulnerability related to the pNetwork protocol. One year later, in November 2023, Gala Games suffered from a $1 billion exploit by white hat hackers, triggering massive concern and affecting GALA prices.

Despite various controversies over these incidents, the GALA token entrenched its position as one of the top 70 crypto tokens by market cap,with a supply valued at $1.56 billion.

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Gala Games confirms $240 Million worth of tokens exploited: “Isolated incident” or history repeated?

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