KEY POINTS
- The recovered funds will be converted to $GALA, the team said
- DWF Labs purchased millions of $GALA to help stabilize the token's price
- Gala's CEO previously acknowledged that the team "messed up" internal controls
Web3 gaming studio Gala Games has recovered the Ether (ETH) it lost to an exploit Monday that resulted in losses of $200 million, on-chain data revealed.
According to Etherscan data, the exploiter returned around 5,913 ETH worth some $22 million based on current prices to a wallet owned by the crypto gaming firm. The fund recovery has been confirmed by Gala. "The funds from the recent security incident have been recovered," the company said. Gala followed up later, saying user compensation and refunds have started. It also said the recovered funds will be converted back to $GALA.
Update: The funds from the recent security incident have been recovered.
— Gala Games (@GoGalaGames) May 21, 2024
At this time we will be using #GalaSwap to convert the Ethereum back to $GALA.
However, it is worth noting that total losses from the exploit were at $200 million after 4.4 billion $GALA tokens were minted and swiped Monday. Gala CEO Eric Schiermeyer, who goes by Benefactor on X (formerly Twitter), said the studio believes it has identified the attacker and was working with law enforcement both in the U.S. and internationally to resolve the matter. The security breach was contained 45 minutes after the unauthorized transaction was made, and the affected wallet was frozen.
Schiermeyer acknowledged that the Gala team "messed up our internal controls" and the security breach "shouldn't have happened."
In a blog post Tuesday, the Gala team expressed gratitude to its partners for their quick response during the incident. It also reiterated its commitment to establishing better guardrails to ensure a hack doesn't take place again. It also reassured users that their GalaChain assets and $GALA Ethereum contract are safe.
Earlier on Tuesday, venture capital and crypto propriety trading firm DWF Labs expressed solidarity with the Gala team, saying it was "saddened" about the news. However, it was committed to supporting its portfolio firms throughout their journeys.
Here at DWF Labs, we are committed to supporting our portfolio companies through thick and thin 🤝🏽
— DWF Labs (@DWFLabs) May 21, 2024
We were saddened to hear about the recent security breach at @GoGalaGames, which led to unauthorised transactions involving $GALA tokens.
In response to this incident, we have… https://t.co/e4caYjvABQ
"In response to this incident, we have taken proactive steps to alleviate market selling pressures and have purchased 28 million $GALA tokens on the open market," DWF Labs said. The goal is to help stabilize $GALA's price, which plummeted by 14% shortly after reports of the hacking surfaced.
There have been concerns among some users regarding the exploit, with some questioning whether it was actually an external hack or an insider misconduct incident.
One user said "I'm not buying that this was a 'hack' or 'exploit.'" Another crypto user, prominent digital assets investor Elja, said he "lost faith" in Gala after his tokens were replaced without his permission with $PGALA that was worth nothing.
Doubts regarding the incident may stem from the 2023 legal battle between Schiermeyer and another Gala co-founder, Wright Thurston. They filed lawsuits against each other over alleged theft of $GALA tokens.
