On May 20, Gala Games experienced a security breach resulting in the unauthorized minting and removal of 5 billion GALA tokens, valued at approximately $240 million. The company took immediate action to secure the GALA smart contract within 45 minutes. 

Gala Games has identified the perpetrator and is collaborating with law enforcement for further investigation. Despite the breach causing a sharp decline in the value of the GALA token, the company remains committed to enhancing security measures and maintaining transparency with its community.

However, the perpetrator successfully sold 600 million tokens through a decentralized exchange known as Uniswap, which was equivalent to approximately $29 million during the attack. As a result of the massive selling, the value of the tokens dropped by 20% in under an hour, plummeting from $0.048 to $0.038.

According to 0xQuit, a pseudonymous smart contract developer and security auditor, a Gala Games admin address that has been compromised or acting maliciously has recently minted 5 billion $GALA (equivalent to $200 million) and has been systematically selling the tokens for the last two hours.

Gala CEO Eric "Benefactor" Schiermeyer provided an update on the Gala Discord server approximately two hours after the hack was identified. He confirmed the exploit and provided an explanation of the situation.

“We identified the compromise and within 45 minutes we secured and removed unauthorized access to the $GALA contract.” - Eric Schiermeyer, Gala CEO

He also made it clear that the ETH contract for $GALA, despite being under the protection of a multi-sig wallet, was not compromised and is secure.

The Gala Games Twitter account also shared the same message. However, Gala clarified that the wallet involved was "frozen." This resulted in the remaining 4.4 billion tokens, which were not sold, being labeled as "effectively burned" in the initial post. This implies that they cannot be transferred or accessed, ultimately leading to their destruction. The overall supply of GALA consists of 50 billion tokens.

Further, Schiermeyer acknowledged internal control issues, attributing them to a mistake on their part. He stated, “We believe we have identified the culprit and we are currently working with the FBI, DOJ and a network of international authorities”.