Author: Nancy, PANews
Recently, Jake Browatzke, the founder of Magic Book, revealed on social media that the Gala Games team, a blockchain gaming platform, has been embroiled in internal strife. Co-founder and CEO Eric Schiermeyer and co-founder Write Thurston have filed lawsuits against each other, accusing each other of "coin theft and market manipulation" and "misuse of funds," involving assets valued at up to $7.3 billion in $GALA.
Subsequently, Gala Games President Jason Brink confirmed the internal dispute and stated that he would not comment on the ongoing litigation. He personally upholds the principle of transparency and encourages everyone to read the complaints filed by the two co-founders in full, and welcomes further discussion. So, what information is revealed in these two complaints? What are the points worth paying attention to?
Eric Schiermeyer accused of destroying tokens worth over $6 billion and privately founding a competing company
Before delving into the article, let's first understand the background of Gala Games. Gala Games is a blockchain video game and entertainment company with annual revenues reaching millions of dollars and employing hundreds of staff. According to the initial agreement, Eric Schiermeyer and Write Thurston were to share all business opportunities in a 50:50 ratio, and the control of the company was authorized by the two directors.
On August 31, Eric Schiermeyer and Write Thurston filed lawsuits against each other in the Utah District Court in the United States. Write Thurston accused Eric Schiermeyer under the name of True North, an investment company located in Wasatch County, Utah, and a shareholder of Gala Games' parent company, Blockchain Game Partners (BGP), holding 44.762% of the shares. Eric Schiermeyer has been serving as the president of BGP since 2009.
In this complaint, Write Thurston pointed out that after the initial distribution of $GALA tokens, any remaining and additional Gala and NFT tokens obtained by True North and Eric Schiermeyer were stored in the latter's wallet under his sole control. Without the approval or knowledge of the board of directors or shareholders, Eric Schiermeyer destroyed over $6 billion worth of $GALA tokens belonging to its shareholders and other members of the Gala community and wasted millions of dollars of company assets. He even transferred the $GALA tokens into his personal control wallet instead of upgrading them as publicly stated. Furthermore, Eric Schiermeyer also borrowed millions of dollars from Gala Games for personal use, such as paying $5 million in installments to purchase a company plane, and privately created offshore entities in Switzerland and Dubai that should have belonged to Gala Games, unilaterally appointing himself as the controlling shareholder, seizing business opportunities that should have belonged to BGP, and providing severely incomplete or incorrect financial information without providing necessary company records to True North.
In addition, the lawsuit also pointed out that Eric Schiermeyer has already or intends to transfer or use most of BGP's current business, technology platforms, assets, and intellectual property. For example, he recently announced the allocation of 8,000 nodes to BGP employees and the closure of True North's nodes, which will generate valuable digital assets. However, Write Thurston believes that Eric Schiermeyer's decision to do this without disclosing or obtaining approval from the board of directors or shareholders will harm the interests of shareholders and the company's value. Prior to this, Eric Schiermeyer had also secretly shut down True North's nodes.
Write Thurston stated that Eric Schiermeyer's dereliction of duty, mismanagement, and self-dealing have caused hundreds of millions of dollars in losses to BGP's reputation and shareholder assets. He has violated his fiduciary duties and rejected all attempts at amicable negotiations. Considering that BGP requires a two-thirds majority vote and only True North and Eric Schiermeyer are the major shareholders, Write Thurston hopes to use this lawsuit to remove him from his positions as director, president, and CEO, and to seek damages of no less than $6 billion, as well as to comply with the terms of the founders' agreement injunction.
Write Thurston accused of stealing and selling $1.3 billion worth of $GALA, and not participating in company operations for many years
In another complaint, Eric Schiermeyer alleged that Write Thurston and True North stole over 8.64 billion $GALA tokens (approximately 20% of the total GALA issued at the time) from Gala Games and claimed to have placed them in a secure wallet for the company's benefit, but he is suspected of transferring and selling approximately $1.3 billion worth of $GALA tokens (about half of the stolen assets). At the same time, Write Thurston also stole licenses to operate "nodes" in the Gala ecosystem and sold them to others, manipulating the nodes to earn $GALA tokens, benefiting himself or True North. They have been sued by the buyers of the stolen assets. It is worth mentioning that earlier this year, the U.S. SEC sued Write Thurston and True North for alleged fraudulent activities related to the energy-saving cryptocurrency company "Green Boxes."
Eric Schiermeyer also pointed out in the lawsuit that although Write Thurston has founded many companies, most of them have ended up in litigation, bankruptcy, or have been sued by the U.S. SEC, and Gala Games seems to be his only legitimate business. In terms of company operations, apart from guiding the company's annual tax returns, Write Thurston has not been involved in the daily operations of the company for many years and has been an absent director who recently resigned. Over the past few years, the company has been working to resolve the problems that Write Thurston had caused in the early days. Due to the discovery of Write Thurston's theft, it was believed that contacting the authorities or filing a lawsuit at the time might lead to the liquidation of the stolen $GALA. Therefore, the company was forced to rely on his statements, treating him as the custodian of $GALA. However, given Write Thurston's secret sale of assets and his prevention of the company from recovering the stolen assets, apart from responding to the sale of some assets to purchase firearms and ammunition, he has not made any other response. The claim that he was protecting the security of the company's $GALA assets is false.
In addition, the lawsuit also revealed the issue of centralization risk in Gala Games' nodes. Write Thurston (or companies under his control) and Eric Schiermeyer each obtained 7,000 Gala Nodes at the beginning of Gala Games. However, both co-founders agreed not to operate these nodes because their centralization would contradict the company's fundamental goal of decentralization.
Eric Schiermeyer believes that Write Thurston's fraudulent behavior has caused significant damage to the reputation and brand of Gala Games, such as Coinbase's refusal to support the GALA v2 upgrade after the SEC's lawsuit against it. He requested the court to make a judgment against Write Thurston and True North, and to order the defendants to return and compensate for any profits from the stolen value of millions of $GALA, and to remove them from their positions as company directors, as well as to compensate for all litigation and legal expenses.
Token price drops over 97% from its peak, full migration to GalaChain by the end of the year
The internal strife within the Gala Games team has also caused community panic. According to CoinGecko data, as of September 4, the price of Gala Games' $GALA token has dropped by over 97.9% from its peak, with the current total market value at approximately $430 million, far below the aforementioned total $7.3 billion $GALA assets mentioned in the lawsuits, representing a drop of over 16% from the time of the litigation.
According to the latest developments from Gala Games, the project will fully migrate the Gala platform to GalaChain by the end of the year, and simplify the usage threshold and development tools to provide comprehensive self-service for external teams by the end of the year. In addition, the social media platform Rep, built on GalaChain, has entered the QA phase of migration from NEAR. Furthermore, Gala Games' games have not been affected by the litigation events, with several projects making positive progress. According to official disclosures, the 3A game Champions Arena surpassed 70,000 downloads in its first week, with a 10% conversion rate from Web2 users to Web3; the social poker game PokerGO has launched its iOS version; and the blockchain game Town Star is about to release its roadmap and token economic model.
From the content of the two complaints mentioned above, the misuse of company funds and node resources, mismanagement of the company, and improper business practices all reveal the centralization and transparency issues in Gala Games' governance, highlighting the necessity of decentralized governance. "When the immortals fight, the mortals suffer," although the internal dispute within Gala Games has not yet been concluded, investors are left to bear the consequences of the project's governance mistakes.
免责声明：本文章仅代表作者个人观点，不代表本平台的立场和观点。本文章仅供信息分享，不构成对任何人的任何投资建议。用户与作者之间的任何争议，与本平台无关。如网页中刊载的文章或图片涉及侵权，请提供相关的权利证明和身份证明发送邮件到support@aicoin.com，本平台相关工作人员将会进行核查。
