Gala Games, a blockchain gaming platform that aims to empower players and developers, is facing a serious internal crisis as its co-founders have filed lawsuits against each other over allegations of theft and mismanagement.
What happens when two co-founders of a blockchain gaming company have a falling out?
A legal battle that could make Game of Thrones look like a tea party.
That’s what’s happening at Gala Games, a platform that lets players own and trade digital assets in games like Town Star and Mirandus. The co-founders, Eric Schiermeyer and Wright Thurston, are suing each other for hundreds of millions of dollars, accusing each other of stealing, wasting, and hiding company funds and assets.
Eric Schiermeyer, the CEO and president of Gala Games, claims that Wright Thurston, the manager and major shareholder of the company, stole around $130 million worth of GALA tokens, which are used to power the Gala Games ecosystem.
How did he do that?
By moving the tokens from a company-controlled wallet to 43 other wallets and then selling or exchanging them through a “complex web of obfuscatory transactions” between September 2022 and May 2023. Schiermeyer also says that Thurston took licenses to run nodes in the Gala network, which can earn GALA tokens, and sold them for his own benefit.
Wright Thurston, on the other hand, says that Eric Schiermeyer wasted millions of dollars in company assets and used company funds for personal purchases.
What kind of purchases?
Well, according to Thurston’s lawsuit, Schiermeyer bought a $1.5 million house in Switzerland, a $300,000 car in Dubai, and a $100,000 watch in New York.
Thurston also says that Schiermeyer created Gala subsidiaries in Switzerland and Dubai and made himself the controlling shareholder to pursue business opportunities without Thurston’s input. Thurston claims that Schiermeyer operated Gala without proper governance and transparency and provided incomplete or incorrect corporate records to Thurston “despite repeated requests.”
Both lawsuits were filed on August 31, 2023, in a Utah District Court and are seeking the removal of the other as a Gala director and various forms of relief and damages. Schiermeyer’s lawsuit wants the return of the allegedly stolen GALA tokens, while Thurston’s lawsuit asks for at least $750 million in various damages and relief.