Gala Games Receives $22 Million Refund Post GALA Token Security Incident

ChainPlay

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6 months ago

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On May 20, an attacker managed to mint $200 million worth of GALA tokens. However, they only sold a small portion before their wallet was frozen. On May 21, the attacker returned approximately $22 million in Ether (ETH) to Gala Games. This incident highlighted both the risks and the rapid response mechanisms within the crypto community.

The return happened quickly. On May 21, the attacker’s wallet sent back 5913.2 ETH, which was valued at about $22.3 million. This amount closely matched the market value of the 600 million GALA tokens sold a day earlier. Gala Games was able to act swiftly, thanks to their response and assistance from federal law enforcement agencies.

Gala Chain Block List Protocol

A significant aspect of Gala Games' response was the use of their new GalaChain’s blocklist protocol. This feature allowed them to freeze 4.4 billion out of the 5 billion GALA tokens minted within just 45 minutes. This quick action prevented the attacker from causing further damage and secured a majority of the tokens.

Eric Schiermeyer, the co-founder and CEO of Gala Games mentioned in posts on X and Discord that the alleged attacker had been identified. Details about the attacker included personal information, such as a home address. There was speculation among the community that the breach was caused by a security contractor who made a mistake by connecting to the wallet without using a VPN. However, Gala Games has not confirmed these details publicly.

Schiermeyer discussed possible actions regarding the returned ETH in a Discord post. He suggested that the team might use the ETH to buy back and burn an equivalent amount of GALA tokens on GalaSwap. This approach aims to stabilize the token’s value and address the inflation caused by the attack.

Governance Vote on Blocklisted GALA

Gala Games is considering a governance vote to decide the fate of the 4.4 billion blocklisted GALA tokens. The proposal is to determine if these tokens should be considered burned. This decision will involve the community and ensure transparency in handling the aftermath of the attack.

Amidst these developments, DWF Labs announced its purchase of 28 million GALA tokens on the open market. This move was intended to help stabilize the token’s value. DWF Labs emphasized the importance of securing investments and supporting the community during such incidents.

GALA has shown resilience despite recent turbulence.The token is up 0.4% in the past 24 hours by CoinGecko. This brings its value to $0.043. Over the last seven days, GALA has increased by 9.3%. This rise indicates that the token is in a recovery phase. The recent performance suggests that GALA is bouncing back. The increases in value reflect the community's confidence and the market's stabilization efforts.

Final Thoughts

The swift and effective response from Gala Games, combined with the unexpected return of funds by the attacker, highlights the importance of robust security measures in the crypto space. The involvement of federal law enforcement and the community's role in governance decisions also demonstrate a collaborative effort to mitigate the impact of such attacks. As the situation unfolds, Gala Games continues to work towards stabilizing and securing their platform and assets.