Sat, June 15, 2024

Gala Games Loses $22.2M Crypto in Security Breach

gala

Quick Look:

  • Gala Games lost $22.2M in cryptocurrency due to lax internal controls.
  • 5,913 ETH and 600M GALA tokens were stolen; 4.4B GALA tokens secured in 45 minutes.
  • Nearly the entire amount, $22M, was recovered, with 4.4B tokens burned.

On May 20, the blockchain gaming platform Gala Games experienced a significant security breach. It resulted in the theft of $22.2 million worth of cryptocurrency. The hacker stole 5,913 ETH and 600 million GALA tokens. Despite the magnitude of the theft, Gala Games managed to prevent the theft of an additional 4.4 billion GALA tokens by securing and removing unauthorized access to the $GALA contract within 45 minutes.

The breach led to unauthorized access to an administrative account for minting new coins. Besides, this incident is part of a troubling trend of security breaches in the gaming and cryptocurrency sectors. Recent incidents include the theft of $320,000 in Binance Coin from WonderHero and a massive heist of over $600 million from Axie Infinity.

Gala Recovers $22M Stolen Crypto, Tightens Security

By May 21, Gala Games had recovered nearly the entire stolen amount, totalling $22 million. Moreover, the recovery was part of a broader incident that involved the unauthorized sale of 600 million GALA tokens for Ethereum, totalling over $22 million, and the additional minting of 5 billion tokens valued at over $222 million. The company effectively burned 4.4 billion of these tokens to mitigate the impact.

The company has addressed the underlying cause of the breach and is cooperating with law enforcement. Therefore, including federal authorities in the United States ensures justice and prevents future incidents. In a reassuring statement, Schiermeyer confirmed the recovery of funds from the recent security incident.

Gala Games Faces Legal Battle Over $130M Token Theft

The security breach adds to Gala Games’ legal challenges, including a lawsuit filed in August by Schiermeyer against Wright Thurston. Schiermeyer claims that Thurston stole $130 million worth of Gala tokens. Meanwhile, Thurston alleges that Schiermeyer’s mismanagement caused the company to waste millions. This ongoing legal battle underscores the turmoil within the company, even as it strives to enhance its security measures and restore user confidence.

In conclusion, while Gala Games has demonstrated resilience by swiftly recovering stolen assets and tightening security protocols, the incident highlights the critical need for robust internal controls and vigilant cybersecurity measures in the rapidly evolving blockchain and gaming industries. Industry stakeholders and users will closely watch the company’s ongoing efforts to rectify the situation and legal disputes.

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