Gala Games Co-founder Sued by CEO Over Alleged Token Theft

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  • Web3 gaming startup Gala Gams has been rocked by a legal battle between its CEO Eric Schiermeyer and co-founder Wright Thurston
  • Schiermeyer has accused Thurston of stealing 8.6 billion GALA tokens and selling them for $130 million, while Thurston alleges Schiermeyer mismanaged the company for personal gain.
  • The ongoing dispute has caused a 13% drop in Gala Games’ token value and raised concerns about the company’s future.

A legal battle has sprung up between the CEO and the co-founder of Web3 gaming startup Gala Games, with one suing the other over the alleged theft of $130 million worth of GALA tokens. CEO Eric Schiermeyer has sued co-founder Wright Thurston, alleging that the latter illicitly took 8.6 billion GALA tokens in early 2021 which he purportedly sold for $130 million before the company could intervene. In a counterclaim filed on the same day, Thurston accuses Schiermeyer of seizing control of Gala Games for his personal gain, including funding a private jet using company resources. 

Two Execs at Loggerheads

Gala Games was founded in 2019 by Thurston and Schiermeyer, who shared a reported 50% ownership, and has interests in blockchain-based music, film, and digital collectibles. It also recently launched Champions Arena, a mobile-based RPG game. However, it’s the action behind the scenes that have captured headlines, with Schiermeyer’s lawsuit painting Thurston as a serial entrepreneur with a track record of problematic ventures, while Thurston alleges that Schiermeyer mismanaged Gala Games and harmed the company’s reputation and shareholder assets.

The core allegation in Schiermeyer’s lawsuit revolves around the alleged theft of GALA tokens by Thurston, which allegedly amounted to over 100% of the total GALA tokens in circulation at the time. According to Schiermeyer, Thurston held the company hostage, as exposing the token theft would lead to a catastrophic collapse of the GALA ecosystem.

To address the situation, Gala Games introduced Gala v2 tokens in May 2023, claiming to bring improvements but allegedly intended to render Thurston’s GALA tokens obsolete while leaving others unaffected. The lawsuit contends that Thurston sold approximately half of his stolen GALA tokens for a substantial profit before ceasing communication with Schiermeyer’s demands.

The lawsuit also references several alleged multi-level marketing schemes linked to Thurston and cites former associates who claim his actions negatively impacted many individuals. Another lawsuit filed by the crypto company Blox accuses Thurston of damages totaling $200 million and Paycheck Protection Program fraud through his entity Block Brothers.

Schiermeyer’s complaint also asserts that Thurston has been largely absent from Gala Games’ operations, often unreachable for extended periods.

Thurston Already in Trouble

Thurston’s counterclaim acknowledges his limited involvement but asserts that Schiermeyer excluded him from key decisions, leading to reputational and financial damage for Gala Games.

Notably, Thurston has faced previous allegations of fraud, including a lawsuit from the SEC related to Green United LLC, a separate company he founded, which allegedly misled investors in a fraudulent green crypto enterprise.

Both Thurston and another defendant in the SEC case have sought to dismiss the lawsuit, claiming that the SEC lacks jurisdiction over digital asset-related cases. Gala Games has yet to respond to requests for comment on the ongoing legal dispute.