In a significant setback for the blockchain gaming sector, Gala Games, a platform co-founded by Zynga's Eric Schiermeyer, reported a major security breach resulting in the loss of over 4 billion GALA tokens, valued at approximately $200 million. This breach, described as a "security incident" by the company, has raised serious concerns about the robustness of internal controls within blockchain enterprises.

In a detailed post on X (formerly Twitter) on May 21, Gala Games disclosed that the affected wallet has been frozen. However, the exact cause of the breach remains unclear. The company emphasized that the incident was isolated, and measures have been taken to address the vulnerabilities. Gala Games is collaborating with law enforcement to identify the perpetrators behind the attack.

Eric Schiermeyer, CEO of Gala Games, elaborated on the breach in another X post on May 21. He revealed that an unknown individual managed to mint 5 billion GALA tokens on May 20, out of which around 600 million tokens were sold. Schiermeyer assured users that within 45 minutes of the breach, the Gala Games team had secured and removed unauthorized access to the GALA contract.

“We messed up our internal controls… This shouldn’t have happened and we are taking steps to ensure it doesn’t ever again,” Schiermeyer stated. He also mentioned that the community would decide on the handling of daily distribution through a node vote, reaffirming the platform’s commitment to decentralized decision-making.

The announcement triggered a sharp drop in the value of GALA tokens, which plummeted nearly 20% to $0.037 before recovering slightly to $0.042.

Founded in 2018 by Eric Schiermeyer, Wright Thurston, and Michael McCarthy, Gala Games aims to empower players by giving them control over their gaming experience. Despite this setback, the company has successfully raised $5 million in funding from notable investors including Block Wolves, Broslyn Capital, CaptureAlpha, DWF Labs, and Ignite Group, as per data from PitchBook.

The incident underscores the importance of robust security measures and internal controls in the rapidly evolving blockchain gaming industry, highlighting the need for continuous improvement to protect assets and maintain user trust.