Gala Games Co-Founders Sue Each Other Over $130M Crypto Theft

A recent lawsuit filed in the United States District Court for the District of Utah has revealed internal strife at Gala Games, a leading company in the web3 gaming industry. Co-founders Eric Schiermeyer and Wright Thurston have filed lawsuits against each other, with the documents becoming public on August 31, 2023.

Detailed Allegations from the Lawsuit

According to the 76-page Verified Shareholder Derivative Complaint filed by Eric Schiermeyer, Wright Thurston and his investment vehicle, True North United Investments, LLC, are accused of stealing 8,645,014,077 GALA tokens from the company.

These tokens are integral to the Gala Games ecosystem. The lawsuit alleges that Thurston initiated a “complex web of obfuscatory transactions” to move, exchange, or sell the stolen tokens, amounting to approximately $130 million, before the company could take action.

Founder and Chief Book Wizard at MagicBookAI state,

BREAKING: Gala Games, one of the largest ecosystems in the web3 gaming industry, is facing internal strife as two of its co-founders have filed lawsuits against each other.

SEC’s Previous Involvement

The lawsuit also brings to light that the United States Securities and Exchange Commission (SEC) had previously sued Thurston and True North for alleged fraudulent activities related to “Green Boxes,” an energy-efficient crypto token venture.

Company and Tokenomics

Gala Games, incorporated under the laws of Wyoming, has developed a blockchain-based gaming infrastructure where GALA tokens serve as the core utility token. The tokens are used for in-game purchases and as a medium of exchange between players. The company also offers Gala Nodes, which are capped at 50,000 and can be operated to earn GALA tokens.

Thurston’s Checkered Past

The lawsuit delves into Thurston’s history, highlighting his involvement in multiple companies that have faced litigation, insolvency, or bankruptcy. It states that Thurston has been sued by the SEC in the past and has been involved in numerous failed ventures, including multi-level marketing companies.

Legal and Financial Repercussions

Schiermeyer’s lawsuit seeks disgorgement or restitution for the stolen cryptocurrency, compensation for the damage caused to Gala Games, and the removal of Thurston as a director. The lawsuit also mentions that Thurston purchased a $40 million house in Puerto Rico in March 2022.

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GALA gains 177% in February as P2E crypto gaming goes mainstream

The play-to-earn (P2E) gaming sector of the cryptocurrency ecosystem has been one of the most resilient sectors to the volatility and price declines seen in the past couple of months as gamers are jumping on the ability to earn income while playing tokenized videogames.

One project that has seen its token price climb rapidly in the first week of February is Gala (GALA), a protocol focused on utilizing blockchain technology to give players control of the games they play and in-game items they acquire.

Data from Cointelegraph Markets Pro and TradingView shows that the price of GALA climbed 117% after hitting a low of $0.177 on Feb. 2 to hit a daily high of $0.384 on Feb. 7.

GALA/USDT 4-hour chart. Source: TradingView

Three reasons for the rapid recovery in GALA price include the upcoming launch of several new popular games on the protocol, a series of new partnerships that have helped expand the GALA ecosystem and the growth of the GALA userbase which continues to hit new record highs.

Launch of new games

The $30 billion P2E gaming sector is growing rapidly, and protocols that wish to keep pace and remain relevant need to launch new games and maintain an active user base.

It is in this light that GALA has been adding support for new projects in the ecosystem such as the upcoming launch of Spidertanks and Legends Reborn.

Aside from the gameplay, the newer generation of games launching on Gala has tapped into some of the growing trends in the P2E space like land and venue sales that provide users with a way to earn passive income, helping to grow a larger pool of community members who are invested in the protocol long term.

Partnerships with other protocols

A second factor helping bolster the momentum for GALA has been the addition of new partnerships that are helping to expand the reach of its ecosystem.

This includes a recently announced collaboration with the 888innercircle community on Twitter, which has a community of more than 205,000 members who are fans of digital art and collectibles.

Gala has also recently established a working relationship with Betwixt, a mental health-focused gaming application that was selected to receive $1 million in funding from the Gala Games Conservatorship fund to help incorporate self-care into the gaming community.

Related: Altcoin Roundup: 3 emerging P2E gaming trends to keep an eye on in 2022

Growing userbase

As a result of the expansion of the Gala ecosystem and the addition of ways to earn a yield through gameplay or other methods such as running a Gala node, the community has seen a steady increase in the number of users over time, especially since the beginning of December 2021.

Total GALA users over time. Source: Dune Analytics

According to data from Dune Analytics, the total number of GALA users stood at 122,230 on Feb. 7, a figure that has tripled since Nov. 7, 2021, from 40,380 users. 

Meanwhile, VORTECS™ data from Cointelegraph Markets Pro began to detect a bullish outlook for GALA on Jan. 27, prior to the recent price rise.

The VORTECS™ Score, exclusive to Cointelegraph, is an algorithmic comparison of historical and current market conditions derived from a combination of data points including market sentiment, trading volume, recent price movements and Twitter activity.

VORTECS™ Score (green) vs. GALA price. Source: Cointelegraph Markets Pro

As seen in the chart above, the VORTECS™ Score for GALA spiked into the green zone on Jan. 27 and hit a high of 82, around 48 hours before the price gained 114% over the next seven days.

The views and opinions expressed here are solely those of the author and do not necessarily reflect the views of Every investment and trading move involves risk, you should conduct your own research when making a decision.