{"investigation":{"slug":"gala-games","entity_name":"Gala Games","trust_score":42,"severity_base":null,"score_modifier":14,"confidence":0.82,"status":"published","content_type":"investigation","summary":"Gala Games is a blockchain gaming platform founded in 2019 by Eric Schiermeyer (co-founder of Zynga) and Wright Thurston, issuing the GALA utility and governance token. The company has been beset by a high-profile inter-founder legal dispute alleging $130 million in token theft, a May 2024 smart contract exploit in which 5 billion GALA tokens worth approximately $200–240 million were minted by a compromised admin wallet, and co-founder Wright Thurston's prior SEC lawsuit over an unrelated $18 million unregistered securities offering. These compounding governance failures, security incidents, and legal controversies place the platform among the more heavily scrutinized projects in the blockchain gaming sector.","sections":[{"content":"Gala Games (legal entity: Blockchain Game Partners, Inc.) was founded in 2019 by Eric Schiermeyer, Wright Thurston, and Michael McCarthy. Schiermeyer is a co-founder of Zynga and former CTO of MySpace, bringing substantial mainstream gaming credentials to the venture. The platform aims to offer play-to-earn games, NFT marketplaces, and node-based reward infrastructure, with the GALA ERC-20 token serving as the ecosystem's primary currency. The GALA token launched in September 2020 and was distributed as rewards to early node operators rather than via an initial coin offering. The token reached an all-time high of approximately $0.82 in November 2021, giving it a peak market capitalization in the billions of dollars before declining sharply through 2022. In January 2024, Gala launched GalaChain, a proprietary Layer-1 blockchain, accompanied by a token migration from Ethereum. As of 2025, the platform reportedly supports over 13 live games with additional titles in development.","heading":"Company Background","sources":[{"url":"https://www.theblock.co/post/248897/gala-games-ceo-sues-co-founder-alleging-130-million-theft-pattern-of-deception","name":"theblock.co","type":"other","credibility":3},{"url":"https://naavik.co/digest/gala-games/","name":"naavik.co","type":"other","credibility":3},{"url":"https://coinmarketcap.com/currencies/gala/","name":"coinmarketcap.com","type":"other","credibility":3},{"url":"https://news.gala.com/galachain/","name":"news.gala.com","type":"other","credibility":3}],"severity":"medium"},{"content":"On August 31, 2023, Gala Games CEO Eric Schiermeyer filed a shareholder-derivative lawsuit in Utah District Court against co-founder Wright Thurston and his investment vehicle, True North United Investments, LLC (which owns approximately 45% of Gala). Schiermeyer alleged that in early 2021, Thurston moved 8.6 billion GALA tokens — described as exceeding 100% of the total reported circulating supply at the time — from a company wallet into 43 separate wallets under Thurston's alleged control. Approximately half of the tokens were allegedly sold at centralized exchanges for over $130 million in profit through a series of transactions between September 2022 and May 2023, characterized in the complaint as a 'complex web of obfuscatory transactions.' Schiermeyer's suit sought Thurston's removal as a company director and the return of the allegedly stolen tokens. Thurston's company, True North, filed a counter-lawsuit on the same date alleging that Schiermeyer exercised unilateral control over the company, committed corporate waste involving at least $600 million in company assets, made personal loans to himself from company funds, and created foreign entities in Switzerland and Dubai making himself the controlling shareholder. Thurston's suit sought at least $750 million in damages and Schiermeyer's removal. As of mid-2024, U.S. District Court records show the litigation was ongoing with motions being filed; no verified settlement or dismissal has been confirmed in publicly available sources.","heading":"Inter-Founder Legal Dispute: $130 Million Token Theft Allegations","sources":[{"url":"https://www.theblock.co/post/248897/gala-games-ceo-sues-co-founder-alleging-130-million-theft-pattern-of-deception","name":"theblock.co","type":"other","credibility":3},{"url":"https://decrypt.co/154848/gala-games-co-founders-sue-each-other-alleging-corporate-waste-130-million-theft","name":"decrypt.co","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/gala-games-founders-sue-court-token-theft-corporate-waste","name":"cointelegraph.com","type":"other","credibility":3},{"url":"https://caselaw.findlaw.com/court/us-dis-crt-d-uta/116514899.html","name":"caselaw.findlaw.com","type":"other","credibility":3},{"url":"https://blockworks.com/news/gala-games-founders-legal-battle","name":"blockworks.com","type":"other","credibility":3}],"severity":"medium"},{"content":"On May 20, 2024, a malicious actor gained control of a private key associated with a privileged minter role on the Ethereum-side GALA smart contract. The compromised wallet had not been used for approximately six months prior to the incident, raising questions about key management practices. The attacker minted 5 billion GALA tokens, valued at approximately $200–240 million at the time. Of the minted supply, approximately 599 million tokens were swapped via decentralized exchange Uniswap for approximately 5,913 ETH (worth roughly $21–29 million). The GALA token price fell approximately 15–20% within an hour of the on-chain activity being detected. Within 45 minutes, the Gala Games team identified the breach and used an existing blocklist function to freeze the attacker's address. CEO Eric Schiermeyer publicly acknowledged that internal controls had failed, stating 'We messed up.' Notably, the President of Blockchain and several other team members had departed the organization three days before the exploit, prompting community speculation — unverified as of publication — about whether an insider was involved. In the days following the attack, the exploiter returned approximately 5,912 ETH to Gala Games. The company subsequently bridged those funds into GalaChain and used them to purchase and burn GALA tokens. All 5 billion unauthorized tokens were burned through a governance-approved contract upgrade. The company referred the case to the FBI and the U.S. Department of Justice. Post-incident, Gala upgraded to Okta SAML identity management, redesigned AWS permissions, and implemented additional sensitive-data tooling.","heading":"May 2024 Smart Contract Exploit: 5 Billion Tokens Minted","sources":[{"url":"https://decrypt.co/231528/gala-games-240-million-worth-tokens-swiped-exploit","name":"decrypt.co","type":"other","credibility":3},{"url":"https://beincrypto.com/gala-games-exploit-hacker-mints-214-million/","name":"beincrypto.com","type":"other","credibility":3},{"url":"https://www.halborn.com/blog/post/explained-the-gala-games-hack-may-2024","name":"halborn.com","type":"other","credibility":3},{"url":"https://news.gala.com/gala-games/incident-report-unauthorized-token-minting-blockchain-game-partners-inc/","name":"news.gala.com","type":"other","credibility":3},{"url":"https://www.coindesk.com/business/2024/05/20/gaming-token-gala-drops-amid-suspect-200m-transfer","name":"coindesk.com","type":"other","credibility":3},{"url":"https://cryptonews.com/news/gala-games-hit-by-23-million-token-exploit-due-to-messed-up-internal-controls/","name":"cryptonews.com","type":"other","credibility":3}],"severity":"medium"},{"content":"Separately from the Gala Games internal dispute, co-founder Wright Thurston and his company Green United LLC were sued by the U.S. Securities and Exchange Commission in March 2023 in connection with the alleged fraudulent sale of approximately $18 million in unregistered securities linked to a cryptocurrency called GREEN. According to the SEC complaint, investors were told they were purchasing miners and nodes associated with a 'public global decentralized power grid,' when in reality the GREEN token allegedly did not exist and the hardware sold either mined bitcoin (which users did not receive) or appeared to do nothing at all. Thurston and Green United filed motions to dismiss the SEC lawsuit on jurisdictional grounds. The Schiermeyer lawsuit against Thurston references this SEC action and alleges that Gala Games is 'the only legitimate enterprise in which Thurston has an interest,' characterizing Thurston as having a history of ventures that 'ended up in litigation, insolvent, bankrupt, and/or sued by the SEC.' No verified information regarding the resolution of the SEC's action against Thurston and Green United was found in publicly available sources as of the research date.","heading":"Co-Founder Wright Thurston: Prior SEC Enforcement Action","sources":[{"url":"https://cointelegraph.com/news/gala-games-founders-sue-court-token-theft-corporate-waste","name":"cointelegraph.com","type":"other","credibility":3},{"url":"https://www.theblock.co/post/248897/gala-games-ceo-sues-co-founder-alleging-130-million-theft-pattern-of-deception","name":"theblock.co","type":"other","credibility":3},{"url":"https://iq.wiki/wiki/wright-thurston","name":"iq.wiki","type":"other","credibility":3}],"severity":"medium"},{"content":"The GALA token has historically faced criticism over its inflationary distribution model. For the year spanning July 2022 to July 2023, over 8.5 million GALA tokens were distributed daily — half to Founder's Node operators and half to the company treasury — with the amount set to halve annually. Critics raised concerns that continuous emissions from both the node reward program and alleged insider sales created persistent selling pressure. On May 15, 2023, Gala Games executed a public token burn of approximately 20.9 billion GALA tokens, estimated at approximately $660 million at prevailing prices, which the team described as a commitment to improved transparency and supply management. The 2024 exploit added an unauthorized 5 billion tokens to supply, which were subsequently burned as described in the exploit section. A tokenomics upgrade announced in April 2026 introduced protocol-level fee burning and distribution to ecosystem participants. GALA peaked at approximately $0.82 in November 2021 and had declined to a fraction of that level by 2024, reflecting both market conditions and project-specific risk factors.","heading":"Tokenomics and Supply Concerns","sources":[{"url":"https://medium.com/@sharomiumar/an-in-depth-economic-analysis-on-gala-tokenomics-bde032b89149","name":"medium.com","type":"other","credibility":3},{"url":"https://naavik.co/digest/gala-games/","name":"naavik.co","type":"other","credibility":3},{"url":"https://coinmarketcap.com/currencies/gala/","name":"coinmarketcap.com","type":"other","credibility":3}],"severity":"medium"},{"content":"The May 2024 exploit exposed a structural governance weakness: a single private key with minting authority over the Ethereum-side GALA contract was left dormant for approximately six months without rotation or revocation, and without multi-signature protection. Security researchers at Halborn noted that the incident could have been mitigated by requiring multiple signatories to approve large minting operations. The inter-founder lawsuits simultaneously revealed alleged unilateral control by Schiermeyer over corporate finances, including undisclosed foreign entity formations and alleged self-dealing loans. Thurston's counterclaim alleged wasteful expenditure of $600 million in company assets without board input. Taken together, the public record suggests a governance environment during 2021–2024 that lacked adequate checks on both technical and financial controls. The company has since implemented technical security upgrades following the exploit, though the underlying corporate governance litigation remained unresolved as of the research date.","heading":"Governance and Access Control Failures","sources":[{"url":"https://www.halborn.com/blog/post/explained-the-gala-games-hack-may-2024","name":"halborn.com","type":"other","credibility":3},{"url":"https://decrypt.co/154848/gala-games-co-founders-sue-each-other-alleging-corporate-waste-130-million-theft","name":"decrypt.co","type":"other","credibility":3},{"url":"https://blockworks.com/news/gala-games-founders-legal-battle","name":"blockworks.com","type":"other","credibility":3}],"severity":"medium"}],"timeline":[{"date":"2019","event":"Gala Games (Blockchain Game Partners, Inc.) founded by Eric Schiermeyer, Wright Thurston, and Michael McCarthy.","source":"","date_original":"2019-01-01"},{"date":"2020-09","event":"GALA token launches, distributed via Founder's Node rewards rather than an ICO.","source":"","date_original":"2020-09-01"},{"date":"2021-02","event":"Alleged theft: Thurston allegedly moves 8.6 billion GALA tokens from company wallet into 43 separate wallets, per Schiermeyer's 2023 lawsuit.","source":"","date_original":"2021-02-01"},{"date":"2021-11-26","event":"GALA token reaches all-time high of approximately $0.82, giving the project a multi-billion dollar market capitalization.","source":""},{"date":"2022-07","event":"GALA daily emissions exceed 8.5 million tokens; critics raise concerns about inflationary supply pressure.","source":"","date_original":"2022-07-01"},{"date":"2022-09","event":"Alleged sale activity begins: Thurston allegedly begins selling GALA through centralized exchanges across a complex transaction chain, per Schiermeyer's lawsuit.","source":"","date_original":"2022-09-01"},{"date":"2023-03","event":"SEC files suit against Wright Thurston and Green United LLC alleging fraudulent sale of $18 million in unregistered securities related to the GREEN token.","source":"","date_original":"2023-03-01"},{"date":"2023-05-15","event":"Gala Games burns approximately 20.9 billion GALA tokens (estimated $660 million) in a public supply-reduction event.","source":""},{"date":"2023-08-31","event":"Eric Schiermeyer files shareholder-derivative lawsuit against Wright Thurston in Utah District Court, alleging $130 million in GALA token theft. Thurston simultaneously files counter-lawsuit against Schiermeyer alleging corporate waste and seeking $750 million in damages.","source":""},{"date":"2024-05-17","event":"President of Blockchain and several other Gala Games team members depart the organization, three days before the subsequent exploit.","source":""},{"date":"2024-05-20","event":"A compromised admin minter wallet on the Ethereum GALA contract is used to mint 5 billion GALA tokens worth approximately $200–240 million. Approximately 599 million tokens are sold via Uniswap for roughly 5,913 ETH before the attacker's address is blocklisted. GALA price falls 15–20% within an hour.","source":""},{"date":"2024-05-22","event":"The exploiter returns approximately 5,912 ETH to Gala Games. The company refers the matter to the FBI and U.S. Department of Justice.","source":""},{"date":"2024-05-31","event":"Gala Games publishes official incident report confirming all 5 billion unauthorized tokens burned via governance vote; company details post-incident security upgrades including Okta SAML and AWS permission redesign.","source":""},{"date":"2026-04-30","event":"Gala Games announces a tokenomics model upgrade introducing protocol-level fee burning and ecosystem distribution on GalaChain.","source":""}],"sources_used":[{"url":"https://www.theblock.co/post/248897/gala-games-ceo-sues-co-founder-alleging-130-million-theft-pattern-of-deception","name":"theblock.co","type":"other","credibility":3},{"url":"https://naavik.co/digest/gala-games/","name":"naavik.co","type":"other","credibility":3},{"url":"https://coinmarketcap.com/currencies/gala/","name":"coinmarketcap.com","type":"other","credibility":3},{"url":"https://news.gala.com/galachain/","name":"news.gala.com","type":"other","credibility":3},{"url":"https://decrypt.co/154848/gala-games-co-founders-sue-each-other-alleging-corporate-waste-130-million-theft","name":"decrypt.co","type":"other","credibility":3},{"url":"https://cointelegraph.com/news/gala-games-founders-sue-court-token-theft-corporate-waste","name":"cointelegraph.com","type":"other","credibility":3},{"url":"https://caselaw.findlaw.com/court/us-dis-crt-d-uta/116514899.html","name":"caselaw.findlaw.com","type":"other","credibility":3},{"url":"https://blockworks.com/news/gala-games-founders-legal-battle","name":"blockworks.com","type":"other","credibility":3},{"url":"https://decrypt.co/231528/gala-games-240-million-worth-tokens-swiped-exploit","name":"decrypt.co","type":"other","credibility":3},{"url":"https://beincrypto.com/gala-games-exploit-hacker-mints-214-million/","name":"beincrypto.com","type":"other","credibility":3},{"url":"https://www.halborn.com/blog/post/explained-the-gala-games-hack-may-2024","name":"halborn.com","type":"other","credibility":3},{"url":"https://news.gala.com/gala-games/incident-report-unauthorized-token-minting-blockchain-game-partners-inc/","name":"news.gala.com","type":"other","credibility":3},{"url":"https://www.coindesk.com/business/2024/05/20/gaming-token-gala-drops-amid-suspect-200m-transfer","name":"coindesk.com","type":"other","credibility":3},{"url":"https://cryptonews.com/news/gala-games-hit-by-23-million-token-exploit-due-to-messed-up-internal-controls/","name":"cryptonews.com","type":"other","credibility":3},{"url":"https://iq.wiki/wiki/wright-thurston","name":"iq.wiki","type":"other","credibility":3},{"url":"https://medium.com/@sharomiumar/an-in-depth-economic-analysis-on-gala-tokenomics-bde032b89149","name":"medium.com","type":"other","credibility":3}],"source_tags":[],"addresses":[],"reviewed":true,"reviewed_by":null,"model_used":"claude-sonnet-4-6","created_at":"2026-05-30T18:32:25.769078+00:00","updated_at":"2026-08-29T01:32:59.037+00:00"}}