Gala Games Founders Battle Over Millions in Misused Tokens

Co-founder Conflict

Gala Games, a Web3 gaming startup founded in 2019, has consistently grown within the decentralized gaming sector. The company is recognized for developing titles such as the mobile RPG Champions Arena and other blockchain-based gaming platforms like blockchain. Historically, Gala's ownership structure has been split between its principal founders.

Despite its growth, Gala Games has been plagued by a serious internal conflict between its two primary co-founders: Wright Thurston and Eric Schiermeyer. Initially, each co-founder controlled 50% of the company, creating a balanced power structure that ultimately led to significant legal disputes. Both parties are now seeking to remove the other from the board of directors, underscoring the intensity of their confrontation and the mutual allegations of misappropriated corporate funds.

Tokens Used as Ammunition

Schiermeyer, representing Gala Games, filed a lawsuit accusing Thurston of orchestrating a sophisticated asset diversion scheme. Legal filings allege Thurston used his investment firm, True North United Investments, to transfer about $130 million in GALA tokens from company wallets.

The alleged fraud operated by transferring funds first to a company wallet, then redistributing them to 43 different wallets, all linked to Thurston and his investment firm. These GALA tokens were sold over several months. Unusually, investigators reported that some proceeds from these sales were used to buy ammunition for firearms, raising significant concern.

Reports indicate the volume of tokens transferred exceeded the total circulating supply at that time, highlighting the scale and complexity of the operation. These events may have coincided with major network protocol updates, although this has not been officially confirmed.

Thurston Responds

In response to Schiermeyer's claims, Thurston filed his own lawsuit accusing his co-founder of inflicting hundreds of millions of dollars in reputational and financial harm on Gala Games.

Thurston specifically accuses Schiermeyer of systematically misusing corporate funds. He alleges that Blockchain Game Partners (BGP), Gala Games’ parent company, made a $5 million payment for an installment purchase of a corporate jet, supposedly for Schiermeyer’s personal benefit, despite the BGP board’s previous decision to separate the company from this investment.

Thurston has publicly admitted he was unreachable for months at a time and claims that during his absence, Schiermeyer managed the company unilaterally, leading to negative financial consequences. Additionally, Thurston is involved in separate litigation with the U.S. Securities and Exchange Commission (SEC) over another of his companies, Green United LLC, and its VERDE token, which the SEC questions as legally valid.

Conclusion

The dispute between Wright Thurston and Eric Schiermeyer at Gala Games marks one of the most notable corporate conflicts in the Web3 gaming industry. Their mutual allegations of asset misuse, including both tokens and company funds, expose vulnerabilities in the governance of emerging crypto companies. Ongoing litigation between the co-founders, combined with Thurston’s regulatory challenges with the SEC, highlights persistent legal and transparency issues in the blockchain and decentralized gaming ecosystem. This case will likely set a key precedent for corporate governance practices in the Web3 sector.

FAQ

Who owns Gala?

Gala is a decentralized token with no single owner. The platform is governed by its community of GALA token holders, who make decisions through voting on the decentralized network.