{"investigation":{"slug":"gala","entity_name":"Gala","trust_score":28,"severity_base":null,"score_modifier":18,"confidence":1,"status":"published","content_type":"investigation","summary":"Gala Games is a blockchain gaming platform founded in 2019 by Eric Schiermeyer and Wright Thurston whose GALA token has been at the center of two major controversies: a 2023 civil lawsuit alleging Thurston stole 8.6 billion GALA tokens (~$130M) from company wallets, and a separate May 2024 smart contract exploit in which an unauthorized minter minted 5 billion tokens worth approximately $200M. Both co-founders have filed competing civil suits alleging misappropriation of hundreds of millions of dollars, while Thurston also faces an unrelated SEC fraud action over a separate crypto mining venture.","sections":[{"content":"Gala Games (Blockchain Game Partners, Inc.) was co-founded in 2019 by Eric Schiermeyer — previously co-founder of Zynga — and Wright Thurston, with involvement from 'The Sims' creator Will Wright in associated projects. The platform allows players to own in-game assets as NFTs and earn GALA tokens through gameplay and by operating infrastructure nodes. Up to 50,000 'Founder's Nodes' can be purchased, with operators rewarded in GALA for supporting the network. In February 2022 Gala introduced Project GYRI, an independent Layer-1 blockchain called GalaChain, intended to reduce transaction costs. As of 2026 the ecosystem hosts more than 40 live games. GALA reached an all-time high of approximately $0.84 in November 2021 during the NFT and metaverse bull run before collapsing more than 97% by end-2022.","heading":"Background","sources":[{"url":"https://www.bitstamp.net/en-gb/learn/cryptocurrency-guide/what-is-gala-games/","name":"","type":"other","credibility":3},{"url":"https://naavik.co/digest/gala-games/","name":"","type":"other","credibility":3},{"url":"https://www.coingecko.com/en/coins/gala","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"On August 31, 2023, CEO Eric Schiermeyer filed a shareholder-derivative action in Utah District Court alleging that co-founder Wright Thurston and his investment vehicle True North United Investments, LLC, stole 8.6 billion GALA tokens in February 2021 — an amount the complaint describes as exceeding 100% of the total GALA supply in circulation at that time. According to the lawsuit, the tokens were first transferred to a company-controlled wallet and then dispersed across 43 separate wallets allegedly under Thurston's control. Between September 2022 and May 2023, Thurston allegedly sold or swapped the tokens through what the complaint calls a 'complex web of obfuscatory transactions,' with proceeds allegedly routed through centralized exchanges Coinbase and Kraken, netting approximately $130 million. Thurston is additionally alleged to have stolen Gala node licenses and resold them, generating further unauthorized proceeds. Schiermeyer's suit seeks Thurston's removal as a company director plus damages including the return of the stolen tokens. Thurston simultaneously filed a counter-suit through True North alleging that Schiermeyer had exercised unilateral control over company operations, wasted or misappropriated approximately $600 million in company assets, and extended unsecured personal loans to himself from company funds. Thurston's counter-suit sought $750 million in damages and Schiermeyer's removal. A court filing from August 2024 shows the court denied True North's motion for preliminary relief that would have replaced Schiermeyer as CEO.","heading":"The Unauthorized Mint Scandal","sources":[{"url":"https://decrypt.co/154848/gala-games-co-founders-sue-each-other-alleging-corporate-waste-130-million-theft","name":"","type":"other","credibility":3},{"url":"https://cryptoslate.com/gala-games-co-founders-clash-in-opposing-lawsuits-seeking-130m-600m-in-damages/","name":"","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/gala-games-founders-sue-court-token-theft-corporate-waste","name":"","type":"other","credibility":3},{"url":"https://blockworks.com/news/gala-games-founders-legal-battle","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"Both lawsuits — Schiermeyer v. Thurston and True North United Investments v. Schiermeyer — were filed August 31, 2023 in the United States District Court for the District of Utah. The competing actions represent shareholder-derivative claims, each purportedly brought on behalf of Gala Games itself. In August 2024, the court denied True North's motion for the appointment of a custodian who would have replaced Schiermeyer as sole CEO and director. Beyond the intra-company dispute, Wright Thurston faces a separate, unrelated SEC enforcement action. On March 3, 2023 — months before the Gala lawsuit was filed — the SEC charged Thurston, Green United LLC, and a promoter named Kristoffer Krohn with operating a fraudulent $18 million unregistered crypto mining investment scheme. The SEC alleged that from April 2018 through at least December 2022, investors were misled into believing devices called 'Green Boxes' and 'Green Nodes' mined a proprietary GREEN token on a blockchain, when in reality the hardware mined Bitcoin that was never delivered to investors. The SEC complaint sought permanent injunctions, disgorgement, and civil penalties. Schiermeyer's Gala lawsuit cited this SEC action, describing Thurston as a 'recidivist salesperson for fraud and registration violations.' Thurston also allegedly faces separate investor lawsuits stemming from the Gala node license sales.","heading":"Legal Battle","sources":[{"url":"https://www.sec.gov/litigation/litreleases/2023/lr25659.htm","name":"","type":"other","credibility":3},{"url":"https://www.coindesk.com/policy/2023/03/06/sec-accuses-utah-based-green-united-of-running-18m-crypto-mining-scam","name":"","type":"other","credibility":3},{"url":"https://cryptoslate.com/gala-games-co-founders-clash-in-opposing-lawsuits-seeking-130m-600m-in-damages/","name":"","type":"other","credibility":3},{"url":"https://caselaw.findlaw.com/court/us-dis-crt-d-uta/116514899.html","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"The complaint in Schiermeyer v. Thurston alleges that Thurston's initial token movement originated from a company-administered wallet before being fanned out into 43 wallets allegedly controlled by True North United Investments. The subsequent liquidation of those tokens allegedly occurred through batched swaps routed to centralized exchanges Coinbase and Kraken. In a separate incident on May 20, 2024, an attacker who had obtained the private key of an Ethereum-side minter address — an account that had reportedly been dormant for approximately six months — minted 5 billion additional GALA tokens, nominally worth approximately $200–240 million at prevailing prices. The attacker sold approximately 600 million of those tokens via Uniswap, realizing roughly $21–29 million in ETH proceeds sold in batches of up to 100 ETH. The GALA token price fell approximately 20% within the first hour. Gala Games identified the compromise within 45 minutes, froze the exploited wallet address, and applied blocklist functionality to prevent further movement of the remaining tokens. The attacker subsequently transferred the unsold tokens back to the compromised minter address, after which Gala claims those tokens were effectively rendered non-transferable. CEO Schiermeyer publicly attributed the breach to inadequate internal controls over privileged minting keys and stated the company was cooperating with the FBI, U.S. Department of Justice, and international law enforcement. The GALA smart contract address on Ethereum is 0xd1d2eb1b1e90b638588728b4130137d262c87cae.","heading":"On-Chain Evidence","sources":[{"url":"https://news.gala.com/gala-games/incident-report-unauthorized-token-minting-blockchain-game-partners-inc/","name":"","type":"other","credibility":3},{"url":"https://www.halborn.com/blog/post/explained-the-gala-games-hack-may-2024","name":"","type":"other","credibility":3},{"url":"https://beincrypto.com/gala-games-exploit-hacker-mints-214-million/","name":"","type":"other","credibility":3},{"url":"https://etherscan.io/token/0xd1d2eb1b1e90b638588728b4130137d262c87cae","name":"","type":"other","credibility":3},{"url":"https://decrypt.co/231528/gala-games-240-million-worth-tokens-swiped-exploit","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"GALA reached an all-time high of approximately $0.84 in November 2021 amid broad NFT and metaverse enthusiasm, giving the token a peak market capitalization in the billions of dollars. By end of 2022, following the broader crypto market contraction, GALA had fallen over 97% to approximately $0.017. News of the co-founder lawsuits in September 2023 triggered an additional intraweek decline of approximately 18.5%, with the token trading at roughly $0.0166 at the time of initial reporting. The May 2024 exploit caused a further intraday drop of approximately 15–20%, with the price falling from around $0.048 to $0.038 within an hour as approximately 600 million stolen tokens were dumped on Uniswap. The allegations within the two civil lawsuits — totaling alleged misappropriations in excess of $730 million across both sides — represent a deeply contested and unresolved governance risk. A community vote concluded April 30, 2026 approved a disinflationary tokenomics update introducing fee-sharing and permanent burns, which the company cited as a step toward more sustainable supply management. However, ongoing litigation, prior security failures, and the broader collapse of Web3 gaming (with analysts estimating 93% of projects inactive) continue to weigh on GALA's market standing.","heading":"Token Impact","sources":[{"url":"https://www.coindesk.com/business/2024/05/20/gaming-token-gala-drops-amid-suspect-200m-transfer","name":"","type":"other","credibility":3},{"url":"https://finance.yahoo.com/news/web3-gaming-firm-gala-games-053627623.html","name":"","type":"other","credibility":3},{"url":"https://decrypt.co/154848/gala-games-co-founders-sue-each-other-alleging-corporate-waste-130-million-theft","name":"","type":"other","credibility":3},{"url":"https://coinmarketcap.com/currencies/gala/","name":"","type":"other","credibility":3}],"severity":"medium"},{"content":"Gala Games presents multiple compounding risk factors that collectively justify an extremely low trust score. First, the platform's co-founder Wright Thurston is alleged in civil litigation to have extracted approximately $130 million in GALA tokens through unauthorized wallet movements, with liquidation allegedly routed through 43 intermediate wallets and two major centralized exchanges; these allegations remain unresolved in litigation as of early 2026. Second, Thurston is simultaneously subject to an SEC fraud enforcement action entirely separate from Gala — alleging he defrauded investors of $18 million via Green United LLC — which courts have not dismissed. Third, the May 2024 smart contract exploit demonstrated that Gala's minting access controls relied on a single unguarded private key, enabling a third party to create 5 billion tokens worth $200 million in a matter of minutes. CEO Schiermeyer publicly admitted fault in internal controls. Fourth, the mutual civil suits between the platform's two principal co-founders — seeking a combined $880 million in damages — indicate deeply dysfunctional governance with no clear independent oversight structure. Fifth, neither suit has reportedly reached a settlement or final judgment, leaving material financial and reputational liability outstanding. Investors and participants should treat GALA as a high-risk asset with unresolved allegations of founder-level theft, documented smart contract security failures, and an ongoing SEC enforcement action against a co-founder.","heading":"Risk Assessment","sources":[{"url":"https://www.sec.gov/litigation/litreleases/2023/lr25659.htm","name":"","type":"other","credibility":3},{"url":"https://cryptoslate.com/gala-games-says-it-resolved-exploit-within-45-minutes-identified-culprit/","name":"","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/gala-games-internal-controls-compromise-messed-up-ceo","name":"","type":"other","credibility":3},{"url":"https://blockworks.com/news/gala-games-founders-legal-battle","name":"","type":"other","credibility":3},{"url":"https://www.halborn.com/blog/post/explained-the-gala-games-hack-may-2024","name":"","type":"other","credibility":3}],"severity":"medium"}],"timeline":[{"date":"2019","event":"Gala Games (Blockchain Game Partners, Inc.) founded by Eric Schiermeyer and Wright Thurston","source":"","date_original":"2019-01-01"},{"date":"2021-02","event":"Alleged unauthorized transfer of 8.6 billion GALA tokens from company wallets by Wright Thurston, per Schiermeyer's later lawsuit","source":"","date_original":"2021-02-01"},{"date":"2021-11-26","event":"GALA token reaches all-time high of approximately $0.84, peak market capitalization in billions of dollars","source":""},{"date":"2022-02","event":"Gala Games introduces Project GYRI / GalaChain, an independent Layer-1 blockchain for the ecosystem","source":"","date_original":"2022-02-01"},{"date":"2022-09","event":"Alleged liquidation of stolen GALA tokens begins; Thurston allegedly sells via Coinbase and Kraken through 43 wallets, per lawsuit","source":"","date_original":"2022-09-01"},{"date":"2022-12-31","event":"GALA price has declined over 97% from its all-time high, closing year around $0.017","source":""},{"date":"2023-03-03","event":"SEC files fraud charges against Wright Thurston and Green United LLC for alleged $18M crypto mining scam unrelated to Gala","source":""},{"date":"2023-05-31","event":"Alleged liquidation of stolen GALA tokens ends, per Schiermeyer lawsuit; Thurston alleged to have netted approximately $130M","source":""},{"date":"2023-08-31","event":"Eric Schiermeyer and Wright Thurston each file civil lawsuits against the other in U.S. District Court for the District of Utah; Schiermeyer seeks $130M+ recovery, Thurston seeks $750M","source":""},{"date":"2023-09-04","event":"GALA token drops approximately 18.5% on the week as public reporting on the dual lawsuits triggers market FUD","source":""},{"date":"2024-05-20","event":"External attacker mints 5 billion GALA tokens via compromised minter private key; sells ~600M tokens for ~$21-29M on Uniswap; GALA drops ~20% intraday","source":""},{"date":"2024-05-20","event":"Gala Games freezes exploited wallet within 45 minutes; CEO Schiermeyer states 'We messed up our internal controls' and confirms FBI and DOJ engagement","source":""},{"date":"2024-08","event":"Utah District Court denies True North / Thurston motion for preliminary relief that would have replaced Schiermeyer as CEO","source":"","date_original":"2024-08-01"},{"date":"2026-04-30","event":"Gala community vote approves disinflationary tokenomics update with fee-sharing and permanent token burns","source":""}],"sources_used":[{"url":"https://www.bitstamp.net/en-gb/learn/cryptocurrency-guide/what-is-gala-games/","name":"","type":"other","archive_url":"http://web.archive.org/web/20260314131031/https://www.bitstamp.net/en-gb/learn/cryptocurrency-guide/what-is-gala-games/","credibility":3,"archive_timestamp":"2026-03-14T13:10:31+00:00"},{"url":"https://naavik.co/digest/gala-games/","name":"","type":"other","archive_url":"http://web.archive.org/web/20260609220830/https://naavik.co/digest/gala-games/","credibility":3,"archive_timestamp":"2026-06-09T22:08:30+00:00"},{"url":"https://www.coingecko.com/en/coins/gala","name":"","type":"other","archive_url":"http://web.archive.org/web/20260317084456/https://www.coingecko.com/en/coins/gala","credibility":3,"archive_timestamp":"2026-03-17T08:44:56+00:00"},{"url":"https://decrypt.co/154848/gala-games-co-founders-sue-each-other-alleging-corporate-waste-130-million-theft","name":"","type":"other","archive_url":"http://web.archive.org/web/20260411170918/https://decrypt.co/154848/gala-games-co-founders-sue-each-other-alleging-corporate-waste-130-million-theft","credibility":3,"archive_timestamp":"2026-04-11T17:09:18+00:00"},{"url":"https://cryptoslate.com/gala-games-co-founders-clash-in-opposing-lawsuits-seeking-130m-600m-in-damages/","name":"","type":"other","archive_url":"https://web.archive.org/web/20260829235928/https://cryptoslate.com/gala-games-co-founders-clash-in-opposing-lawsuits-seeking-130m-600m-in-damages/","credibility":3,"archive_timestamp":"2026-08-29T23:59:28+00:00"},{"url":"https://cointelegraph.com/news/gala-games-founders-sue-court-token-theft-corporate-waste","name":"","type":"other","archive_url":"https://web.archive.org/web/20260829130804/https://cointelegraph.com/news/gala-games-founders-sue-court-token-theft-corporate-waste","credibility":3,"archive_timestamp":"2026-08-29T13:08:04+00:00"},{"url":"https://blockworks.com/news/gala-games-founders-legal-battle","name":"","type":"other","archive_url":null,"credibility":3,"archive_error":"error:no-request","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://www.sec.gov/litigation/litreleases/2023/lr25659.htm","name":"","type":"other","archive_url":"https://web.archive.org/web/20260830010252/https://www.sec.gov/enforcement-litigation/litigation-releases/lr-25659","credibility":3,"archive_timestamp":"2026-08-30T01:02:52+00:00"},{"url":"https://www.coindesk.com/policy/2023/03/06/sec-accuses-utah-based-green-united-of-running-18m-crypto-mining-scam","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null},{"url":"https://caselaw.findlaw.com/court/us-dis-crt-d-uta/116514899.html","name":"","type":"other","archive_url":null,"credibility":3,"archive_error":"forbiddenaccess","archive_status":"unarchivable","archive_timestamp":null},{"url":"https://news.gala.com/gala-games/incident-report-unauthorized-token-minting-blockchain-game-partners-inc/","name":"","type":"other","archive_url":"https://web.archive.org/web/20260830002428/https://news.gala.com/gala-games/incident-report-unauthorized-token-minting-blockchain-game-partners-inc/","credibility":3,"archive_timestamp":"2026-08-30T00:24:28+00:00"},{"url":"https://www.halborn.com/blog/post/explained-the-gala-games-hack-may-2024","name":"","type":"other","archive_url":"http://web.archive.org/web/20260605230758/https://www.halborn.com/blog/post/explained-the-gala-games-hack-may-2024","credibility":3,"archive_timestamp":"2026-06-05T23:07:58+00:00"},{"url":"https://beincrypto.com/gala-games-exploit-hacker-mints-214-million/","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null},{"url":"https://etherscan.io/token/0xd1d2eb1b1e90b638588728b4130137d262c87cae","name":"","type":"other","archive_url":"http://web.archive.org/web/20260822040558/https://etherscan.io/token/0xd1d2Eb1B1e90B638588728b4130137D262C87cae","credibility":3,"archive_timestamp":"2026-08-22T04:05:58+00:00"},{"url":"https://decrypt.co/231528/gala-games-240-million-worth-tokens-swiped-exploit","name":"","type":"other","archive_url":"http://web.archive.org/web/20260313145316/https://decrypt.co/231528/gala-games-240-million-worth-tokens-swiped-exploit","credibility":3,"archive_timestamp":"2026-03-13T14:53:16+00:00"},{"url":"https://www.coindesk.com/business/2024/05/20/gaming-token-gala-drops-amid-suspect-200m-transfer","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null},{"url":"https://finance.yahoo.com/news/web3-gaming-firm-gala-games-053627623.html","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null},{"url":"https://coinmarketcap.com/currencies/gala/","name":"","type":"other","archive_url":"http://web.archive.org/web/20260712104323/https://coinmarketcap.com/currencies/gala/","credibility":3,"archive_timestamp":"2026-07-12T10:43:23+00:00"},{"url":"https://cryptoslate.com/gala-games-says-it-resolved-exploit-within-45-minutes-identified-culprit/","name":"","type":"other","archive_url":"http://web.archive.org/web/20251010123514/https://cryptoslate.com/gala-games-says-it-resolved-exploit-within-45-minutes-identified-culprit/","credibility":3,"archive_timestamp":"2025-10-10T12:35:14+00:00"},{"url":"https://cointelegraph.com/news/gala-games-internal-controls-compromise-messed-up-ceo","name":"","type":"other","archive_url":null,"credibility":3,"archive_timestamp":null}],"source_tags":["defillama"],"addresses":[],"reviewed":true,"reviewed_by":null,"model_used":"claude-sonnet-4-5","created_at":"2026-05-04T02:54:32.265391+00:00","updated_at":"2026-08-30T01:16:27.08413+00:00"}}