In recent news, Gala Games, a prominent blockchain gaming platform, fell victim to a significant security breach resulting in the unauthorized sale of 600 million GALA tokens valued at $23 million. CEO Eric Schiermeyer attributed the incident to inadequate internal controls within the company. The exploit took place on May 20 at 7:32 pm UTC when a hacker gained access to a Gala Games admin address, allowing them to mint 5 billion new GALA tokens worth approximately $200 million. Subsequently, the attacker sold 600 million of these newly minted tokens on the decentralized exchange Uniswap.
Following the breach, Gala Games took swift action to mitigate further damage. They froze the compromised wallet to prevent the hacker from selling the remaining tokens. Additionally, Gala Games identified and removed the unauthorized access to the GALA contract, ensuring stakeholders that their Ethereum contract remained secure and uncompromised. CEO Schiermeyer announced that the remaining 4.4 billion tokens were made unsellable and burned to prevent additional exploitation.
In response to the security breach, Gala Games has been collaborating with the FBI, the U.S. Justice Department, and international authorities to investigate the incident and bring those responsible to justice. Schiermeyer publicly acknowledged the failure of internal controls that led to the breach, stating, “We messed up our internal controls. This shouldn’t have happened, and we are taking steps to ensure it doesn’t happen again.”
The immediate aftermath of the security breach saw GALA’s price plummet to a 24-hour low of $0.038, representing a 20% drop from its daily high. However, the token price has partially recovered to $0.041, according to CoinGecko. In addition to the breach, internal legal disputes between Schiermeyer and co-founder Wright Thurston, involving allegations of mismanagement and theft, have added to Gala Games’ challenges.
The incident at Gala Games is not an isolated case within the blockchain and cryptocurrency industry. Other platforms, such as Sonne Finance, Rain cryptocurrency exchange, and Pike Finance, have also recently suffered exploits due to various vulnerabilities in their systems. These incidents underscore the critical importance of robust internal controls and security measures in safeguarding digital assets and user funds.
The security breach at Gala Games serves as a stark reminder of the repercussions of inadequate internal controls in blockchain gaming platforms. The company’s swift response and collaboration with law enforcement agencies demonstrate a commitment to addressing the breach and preventing future incidents. However, the incident highlights the pervasive security challenges faced by companies operating in the blockchain space and underscores the need for continuous vigilance and improvement in cybersecurity practices.
