Gala Games Sues pNetwork Over Million-dollar Exploit

Reading Time: 2 minutes
  • Gala Games has sued pNetwork blaming it for a hack that took place last year
  • The protocol claims pNetwork neglected its security and shared a private key in plain text
  • Gala wants over $27 million in damages from pNetwork

GameFi protocol Gala Games has taken pNetwork to court for its hand in a million-dollar exploit that took place last year. Gala believes that pNetwork is responsible for the hack because it shared a private key in plain text thus compromising the protocol’s security. The GameFi project wants over $27 million in damages.

Private Key Publicly Available on GitHub

The exploit that happened in 2022 saw the hacker mint Gala tokens which they later deposited on PancakeSwap, an event that saw Gala tokens lose substantial value. According to Gala Games, this could have been avoided if pNetwork had not shared a private key linked to pNetwork’s smart contracts.

According to SlowMist, the key was openly available on GitHub, with pNetwork admitting “it mistakenly leaked a governance key” that caused havoc on Gala Games by exploiting “the pGALA contract on the BNB Chain” blockchain.

Gala said pNetwork’s negligence caused damages worth over $27.7 million. The project revealed that the amount will be changed to GALA tokens “and burned.”

Coup, Not a Hack

According to pNetwork, the protocol wasn’t actually hacked but the malicious actor took over ownership of the affected contract, permitting them to alter the contract. Speaking to Cointelegraph, the cross-chain’s spokesperson said that they have already turned the matter over to the Swiss authorities.

Some blockchain veterans like Ethereum co-founder Vitalik Buterin have in the past expressed skepticism over cross-chain bridges saying that they have so many points of weakness. Some notable DeFi bridge hacks include the Ronin hack where $540 million was lost and the Wormhole exploit where $320 million was siphoned.

With pNetwork admitting liability, it’s to be seen whether the court will grant Gala Games wishes or wait for the Swiss authorities to complete investigations.