Gala Games Files $28 Million Lawsuit Against pNetwork

• Gala Games demands $27.7 million from pNetwork for out-of-pocket expenditures.
• The GameFi project claimed the alleged breach cost the company more than $25M.

In a lawsuit filed on March 20th, Gala Games, developer of the GameFi project, said it had recently sued pNetwork, the cross-chain interoperability bridge it had been using on the BNB Smart Chain. When an illegitimate wallet address mined over $2 billion in GALA and dumped it on PancakeSwap in November 2022. It drained $4.5 million from the liquidity pool and caused a significant drop in the price of GALA tokens.

The lawsuit read:

“The lawsuit states that (i) pNetwork admitted that it mistakenly leaked a governance key when deploying this pGALA bridge, which such key was later used by an attacker to breach the pGALA contract on the BNB chain.”

Alleged Breach Costed Over $25M

According to the lawsuit, pNetwork’s “negligence and tortious interference” caused the occurrence. On November 7th, 2022, SlowMist, a blockchain analytics platform, said that the problem may have been caused by the exposure of a plain text private key in one of three pNetwork-affiliated smart contracts on Gala. According to SlowMist, the compromised private key was hosted on GitHub.

On the other hand, pNetwork stated:

“As the pNetwork team, we would like to express our genuine surprise and concern upon hearing the recent announcement by the GALA Games Project to sue pNetwork. We would like to clarify that, three months ago, we had already submitted a comprehensive report to the Swiss authorities detailing the entire incident.”

Gala Games demands $27.7 million from pNetwork for out-of-pocket expenditures related to the breach, extra compensation for injuries, punitive damages, and other remedies, claiming the alleged breach cost the company more than $25 million.

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