In a lawsuit filed on March 20, GameFi project developer Gala Games said it recently sued pNetwork, the cross-chain interoperability bridge used by the BNB smart chain. An illegal wallet address mined over $2 billion in GALA and sold it on PancakeSwap in November 2022. It withdrew $4.5 million from the liquidity pool and caused the GALA token price to drop significantly.
Gala Games Files $28M Lawsuit Against pNetwork
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.”
According to the lawsuit, pNetwork’s “negligence and tortuous interference” caused the event. On November 7, 2022, SlowMist, a blockchain analytics platform, said the problem could be caused by exposing the private key in plaintext in one of the three smart contracts associated with pNetwork on Gala. According to SlowMist, the compromised private key is hosted on GitHub.
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 is seeking $27.7 million from pNetwork for breach-related disbursements, additional compensation for injury, punitive damages, and other remedies, stating that the breach was allegedly cost the company more than $25 million.
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