Gala Games, a leading web3 gaming firm, suffered a significant exploit on May 20. An attacker minted 5 billion GALA tokens worth approximately $206 million, as reported by blockchain explorer Etherscan. 

Solidity developer 0xquit revealed that the exploit occurred through an admin address, with the potential involvement of either an external hacker or a rogue address owner. The attacker reportedly had the capacity to mint 12 billion more before reaching a cap. 

However, the exploited address was blacklisted, preventing further minting without access to another admin address. Despite the large volume of minted tokens, only $21 million worth of tokens paired into Ethereum (ETH) before Gala Games intervened and blacklisted the attacker's address.

Eric Schiermeyer, CEO of Gala Games, assured users on X (formerly Twitter) that the company had identified the compromise and secured the $GALA contract within 45 minutes. 

Schiermeyer stressed that the ETH contract for $GALA remained secure under a multicurrency wallet and was never compromised.

Security Concerns and Investigations

The exact nature of the security incident remains unclear. It is uncertain whether the breach resulted from an insider threat or if an external party gained access to an administrative wallet. Gala Games users are awaiting further announcements and official responses.

Schiermeyer confirmed that the FBI, the U.S. Department of Justice, and international authorities are involved in the investigation. This incident underscores the need for enhanced security measures for admin wallets in blockchain projects.

Previous Security Incidents

Gala Games has faced similar challenges in the past. In November 2021, the company experienced a $130 million loss due to an exploit. 

Later, in 2023, a legal dispute arose between co-founders Eric Schiermeyer and Wright Thurston, with allegations of theft against Thurston.

In November 2023, Gala Games encountered another exploit worth $1 billion, executed by white hat hackers. Although funds were secured at that time, the incident raised concerns and affected GALA token prices.

Despite these controversies, GALA remains one of the top 70 crypto tokens by market cap, with a supply worth $1.56 billion. 

However, the latest incident caused rapid losses for the GALA token. The price dropped from $0.048 to $0.038 in less than two hours, marking a decline of over 20%. As of 12:04 am UTC, the price has partially recovered to $0.04146.