Last Updated on September 4, 2023 by Bitfinsider

Two prominent executives at Web3 gaming startup Gala Games are now suing each other, resulting in a 13% decline in the price of its token.

Gala Games CEO Eric Schiermeyer recently filed a lawsuit against the business’s co-founder Wright Thurston, alleging that Thurston stole 8.6 billion GALA tokens in early 2021 and sold them for $130 million before the company could stop him. Schiermeyer’s claim, filed on August 31, also accuses Thurston of a practise of starting firms that fail, go bankrupt, or become embroiled in litigation.

Thurston claims that Schiermeyer assumed control of Gala Games for himself in order to spend business assets for personal expenses, including the purchasing of a private jet, in his own complaint filed the same day.

Schiermeyer states in his lawsuit that Thurston “has founded numerous companies, the majority of which have ended up in litigation, insolvent, bankrupt, and/or sued by the SEC,” and that Gala Games is the only legitimate venture in which Thurston has a stake.

Thurston stole 8.6 billion GALA tokens in February 2021, more than 100% of the total quantity of GALA in circulation at the moment, according to market aggregators. According to Schiermeyer, Thurston basically held the company hostage because disclosing the token theft would compel him to liquidate his assets, causing the GALA ecosystem to collapse.

As a partial answer, the business launched Gala v2 tokens in May 2023, claiming that they would bring “a host of improvements to the table, including enhanced burn mechanisms, security enhancements, and future upgradeability.” Only Schiermeyer says that the true objective of the tokens was to render the GALA tokens in Thurston-controlled wallets outdated while keeping the rest of the ecosystem untouched.

The lawsuit says that by the time of the upgrade, over half of Thurston’s GALA tokens had wound up on centralised exchanges, where Thurston sold them for a profit of more than $130 million. The lawsuit states that when Schiermeyer insisted that Thurston stop selling the stolen GALA, “Thurston first responded that he was selling some of the GALA tokens in order to purchase ammunition for firearms.” He then ceased reacting.”

The lawsuit names many organisations that Schiermeyer believes were multi-level marketing schemes, and it quotes a former Thurston partner who claims Thurston’s actions “ruined the lives of thousands[s] of young people as well as seasoned investors.” The petition also includes a separate lawsuit brought by the crypto business Blox against Thurston for alleged damages of $200 million linked to equipment Thurston promised but never delivered. Thurston is also accused of Paycheck Protection Programme fraud through his firm Block Brothers, according to the lawsuit.

Schiermeyer also claims Thurston has been mainly absent from Gala’s activities, being “virtually unreachable for many months at a time,” according to his complaint.