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An uneasy occurrence has taken place at Gala Games, with the CEO of the company, Eric Schiermeyer, having filed a lawsuit against the Co-Founder, Wright Thurston. This is with regard to the misappropriation of funds. As a result, its token value has fallen by 13%. The allegation is that Thurston had siphoned off 8.6 billion GALA tokens towards the beginning of 2021 and sold them for an amount of $130 million when the company had no awareness of the fact.
Schiermeyer filed the lawsuit on the 31st of August. In retaliation, Thurston, too, filed a lawsuit against Schiermeyer, accusing him of taking the reins of the company and utilizing the company’s funds for personal gains like buying a private jet.
Gala Games, which is a startup in Web3 gaming, was co-founded at the beginning of 2019. The co-founders of the company are Thurston and Schiermeyer. Each had a claim to own an equal share of 50%. In both the lawsuits, however, there is no mention of the third co-founder of the company, Michael McCarthy. Of late, the company was instrumental in introducing Champions Arena, a turn-oriented game for mobile devices; along with that was their foray into blockchain-oriented music, film, and digital collectibles.
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As per the lawsuit filed by Schiermeyer, his allegation is that Thurston has established multiple companies, out of which many are embroiled in litigation, bankruptcy, and insolvency. Some have lawsuits against them by the SEC. He mentions the fact that it is Gala Games, which is the only business that is above board. The prime charge he makes is that Thurston is responsible for siphoning off 8.6 billion GALA tokens in February 2021, which amounted to over cent percent of the circulating GALA at that point in time. Going public with the fraud would have brought the GALA ecosystem to its knees.
As a remedial measure, In May 2023, Gala Games released Gala v2 tokens that were promoted as an altered version. The claims were that it had improved burn systems, better safety, and futuristic scalability. It was Schiermeyer who declared that the actual role of the tokens was to make the GALA tokens in Thurston’s wallets redundant without impacting the remaining ecosystem.
At the time of the scaling, as per the lawsuit, almost half of Thurston’s GALA tokens found themselves at centralized exchanges. Thurston is supposed to have then sold them for more than $130 million as profit. On Schiemeyer’s objections, Thurston initially claimed he was purchasing ammunition for firearms and finally dropped out of the grid. The lawsuit speaks of more MLM companies, which negatively impacted a lot of investors. There is another lawsuit filed by Blox against Thurston for ruining $200 million worth of equipment and never rectifying the situation. Thurston was also a part of the Paycheck Program fraud.
As for Thurston’s lawsuit, Schiemeyer kept him away from the functioning of the company and said that he was responsible for the overall downfall of Gala Games and the immense amount of losses the company incurred.
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In other cases against Thurston, the SEC had filed a lawsuit against his founding company, Green United, alleging misleading investors into depositing $18 million in fraud crypto business. As per the SEC, a promoter of the company, Kristoffer A. Krohn, spread the word that they were buying miners and nodes boosted by the ERC-20 GREEN token. In actuality, there was no GREEN token. Both of the defendants filed their own appeals for doing away with the SEC lawsuit, citing it does not have the required jurisdiction.
