Gala Games Exploit Results in Over $200 Million Loss
An unknown actor minted and withdrew 5 billion GALA tokens from the Web3 gaming platform Gala Games, amounting to approximately $210 million, according to Etherscan data.
The hacker who breached Gala Games returned ~5913 ETH (approximately $22.1 million at the time of the transaction) to the project, proceeds from the sale of 600 million stolen GALA.
The team converted the cryptocurrency back into native tokens.
Update: The funds from the recent security incident have been recovered.
At this time we will be using #GalaSwap to convert the Ethereum back to $GALA.
— Gala Games (@GoGalaGames) May 21, 2024
The developers also initiated a vote among nodes on a governance proposal concerning the deployment of a temporary contract to “formalize the burning” of the unauthorized 5 billion GALA tokens.
The perpetrator managed to sell 600 million GALA through the decentralized exchange Uniswap. Consequently, the asset’s price plummeted by about 20% in less than an hour—from approximately $0.048 to $0.038 (CoinGecko).
At the time of writing, the price has partially recovered, with a daily decline of just over 3%.
The exploit was confirmed by Gala Games co-founder Eric Schiermeyer. He stated that the team identified the smart contract compromise within 45 minutes and terminated unauthorized access. The remaining 4.4 billion GALA held by the hacker were locked and burned.
Hey Everyone…
I always knew there was a reason I never talk shit about other projects getting hacked…I’m sorry to say we had an incident that resulted in the unauthorized SALE of 600million (21million usd) $GALA tokens and the effective BURN of 4.4 billion tokens.
We…
— benefactor (@Benefactor0101) May 20, 2024
“We breached our internal control system… This should not have happened, and we are taking measures to ensure it never happens again. We believe we have identified the perpetrator and are currently working with the FBI, the Department of Justice, and a network of international agencies,” he stated.
The Gala Games team described the incident as isolated, with the cause addressed. Developers promised to disclose additional information as the investigation continues.
The security incident involving the $GALA token has been contained and the impacted wallet has been frozen.
This was an isolated incident, the cause of which has been addressed and we are working closely with law enforcement to investigate the individuals behind the breach.…
— Gala Games (@GoGalaGames) May 21, 2024
Back in 2023, project co-founders Schiermeyer and Wright Thurston accused each other of stealing $130 million.
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