Legal Battle at Gala Games: CEO Accuses Co-Founder of $130 Million Theft

Gala Games, the blockchain gaming platform, is caught in a legal storm as co-founders filed lawsuits against each other. CEO Eric Schiermeyer has accused his co-founder, Wright Thurston, of arranging the theft of a whopping $130 million worth of Gala tokens.

On August 31, Wright Thurston and Eric Schiermeyer filed legal proceedings against each other in a Utah District Court. Schiermeyer, who also serves as Gala’s CEO, has alleged that Thurston, along with his investment firm True North United Investments, committed the theft in early 2021.

The accused parties are said to have stolen the GALA tokens, integral to the Gala Games ecosystem.

Schiermeyer’s lawsuit claims that Thurston moved the GALA tokens into a wallet controlled by the company. However, Thurston later shifted them to 43 different wallets, employing a series of complex and deceptive transactions between September 2022 and May 2023.

In response, Thurston initially claimed that he held the tokens in secure wallets for Gala but later admitted to selling them, asserting ownership over the GALA tokens. Schiermeyer’s lawsuit vehemently disputes this claim.

Moreover, Thurston is accused of stealing licenses essential for running Gala ecosystem nodes, which can generate GALA tokens. He allegedly sold these licenses for personal gain.

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.

— Jake Browatzke 🚀 (@jakebrowatzke) September 2, 2023

Counterclaims and Corporate Mismanagement Allegations

Simultaneously, Thurston, representing True North, filed a lawsuit against Schiermeyer. Thurston accuses Schiermeyer of causing Gala to sell off millions of dollars in company assets and borrowing substantial sums of Gala’s funds for personal purchases. 

Furthermore, he alleges that Schiermeyer established Gala entities in Switzerland and Dubai, making himself the controlling shareholder to pursue business opportunities, effectively sidelining Thurston’s input.

True North’s lawsuit asserts that Schiermeyer operated Gala without Thurston’s involvement, providing incomplete or inaccurate information and corporate records despite Thurston’s repeated requests for transparency.

Both lawsuits have requested the removal of the other party from the Gala and seek substantial damages and relief. Thurston seeks at least $750 million in damages, while Schiermeyer’s suit calls for Thurston’s removal as a Gala director and the return of the allegedly stolen GALA tokens.

📢 THREAD: Legal Drama Unfolds Between True North and @GoGalaGames ' Eric Schiermeyer

— Timnology (@Timnologynl) September 2, 2023

Legal History and Regulatory Scrutiny

This legal case is not the first instance of legal trouble for Thurston. Earlier this year, the United States Securities and Exchange Commission (SEC) sued Thurston, True North, and another company he founded, Green United, for their involvement in a fraudulent crypto mining scheme.

These lawsuits have shed light on Thurston’s track record of founding companies that often end up embroiled in legal disputes, insolvency, or bankruptcy, as Schiermeyer points out.

The Gala Games project, known for its integrated GALA token, offers gaming experiences, an NFT marketplace, and ventures in blockchain-based music, film, and digital collectibles. 

Gala Games operates on the Ethereum and Binance Smart Chain and relies on a network of decentralized nodes owned by users to perform various functions within the ecosystem.

The legal battle within Gala Games comes at a crucial time for the Web3 ecosystem, striving to collectively address regulatory challenges, particularly concerning the United States Securities and Exchange Commission (SEC).

The price of the GALA token has experienced a 13% drop, reflecting the uncertainty surrounding the project’s future. 

NB: Any Information provided here is NOT FINANCIAL ADVICE. Do Your Own Research before making any Financial Decisions.