Gala Games Internal Strife, Legal Battles, and Its Potential Impact on Web3 Gaming Ecosystem

Gala’s Co-Founders, Eric Schiermeyer and Wright Thurston are Suing Each Other for Hundreds of Millions of Dollars

Gala Games has been a promising player in blockchain gaming and cryptocurrencies for the past couple of years. It was founded with the vision of revolutionizing the gaming industry through decentralized technologies and quickly gained recognition for its unique approach. However, the recent turmoil within the company has left many wondering about its future.

Gala Games surprised its token holders by announcing a significant development involving their native tokens: the forking of its native GALA token into a new version known as the “v2 GALA token.” Initially, the move was explained as an effort to introduce “enhanced burn mechanisms, security enhancements, and future upgradeability.” The situation, however, took an unexpected turn.

In May, Gala Games dropped another bombshell by burning 42% of the GALA v2 tokens, citing concerns about a “fundamental risk to the overall tokenomics of the project” related to a potential “dump and exit scenario.” This decision further fueled the confusion and skepticism surrounding Gala Games.

Co-Founders at Odds

However, the real reasons for the suspicious decisions of the Gala Games unfolded when it was revealed that Gala’s two co-founders, Eric Schiermeyer and Wright Thurston, were engaged in a bitter legal dispute. Eric Schiermeyer, a co-founder of Zynga and a prominent figure in the gaming industry, took legal action against Thurston.

The lawsuit by Schiermeyer accused Thurston of stealing and selling over $130 million worth of GALA tokens. This revelation shed light on Thurston’s questionable history, including his involvement in the fraudulent Green Blockchain project. In the Green Blockchain project Thurston, among others, faces a lawsuit from the SEC. Thurston’s past ventures also included an unsuccessful Bitcoin mining company in 2017.

Thurston portrays himself on social media as a trustworthy individual, frequently appearing in online photos with his wife and emphasizing his community involvement. These allegations, on the other hand, suggested a pattern of deception and a con personality: someone who enriched himself at the expense of investors.

In his counter-suit, Thurston claims that Schiermeyer benefited personally at the expense of Gala Games and Thurston himself. Thurston alleges that Schiermeyer had too much control over company assets and used that control to his own advantage. Among the accusations were claims that Schiermeyer controlled various assets within the company without wider approval, created new subsidiaries, and made unilateral decisions regarding token re-issuance and burning.

Thurston’s counter-suit also raised eyebrows by claiming Schiermeyer had spent $5 million on a down payment on a private jet. Thurston also claimed that reissuing the Gala tokens had cost him $151 million. These legal battles not only exposed deep-seated internal conflicts within the company but also raised concerns about its financial management.

Governance and Ownership Issues

The governance and ownership structure of the company is one of the fundamental issues contributing to the Gala Games saga. When Gala Games was established, its bylaws mandated a 2/3 majority vote from the board to take any significant action. The problem here is that the company only has two equal shareholders: Eric Schiermeyer and Wright Thurston.

This governance structure was nothing short of a ticking bomb. It was imminent that it would make way for huge conflicts and disputes. Regardless of the company’s trajectory and unforeseen challenges, the 2/3 majority requirement essentially tied the hands of both co-founders, making it difficult to make critical decisions in a fast-paced and dynamic industry. It’s really absurd that such a huge company had such a silly structural problem at its very core.

As a result, the very structure designed to provide stability to Gala Games ultimately proved to be a source of instability. This structural flaw became a critical factor contributing to the company’s internal strife and its struggle to navigate through difficult times.

The Gala Games: Beyond the Legal Battles

Amidst the turmoil and legal disputes, Gala Games continues to operate and expand its ecosystem. The company has some big-grossing games in the market currently including Spider Tanks, Town Star, Poker GO, and Champions Arena. All of these games are deployed on Gala’s own blockchain.

In response to concerns from GALA token holders regarding the uncertain future, Gala Games has attempted to reassure the community. They have teased an “imminent launch of several titles” and promised “tons more game news.” Gala Games has also hinted at the introduction of “REP,” which appears to be a reference to a social media platform they are planning to launch.

Check out one of Gala Games Wild West Battle Royale Shooter Grit:

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