Huobi, a cryptocurrency exchange, and Gala Games, a Web3 gaming platform, have announced that they will distribute up to $50 million worth of cryptocurrencies and software licenses to GALA token holders who lost their money in a scheme involving the utility token.
The scheme involved a bad actor minting $1 billion worth of pGALA, a wrapped version of GALA that trades on BNB Chain, and selling off the tokens on decentralized exchanges, causing the price of GALA to drop by 94%. PNetwork, Gala Games’ cross-chain interoperability bridge, coordinated a “white hat attack” on itself to prevent bad actors from stealing users’ money.
Huobi has pledged $25 million in cash and user benefits, including 15 million tether (USDT) and $10 million worth of equity compensation to the victims of the scheme. Gala Games will offer $25 million worth of node licenses to affected users. The firms plan to begin compensating victims within the next week.
The user refunds are just one measure Huobi and Gala Games are taking to address the fallout of the pGALA scheme. In March, Gala Games filed a lawsuit seeking $27.7 million in damages and compensation from pNetwork.
This move shows the firms’ commitment to protecting their users and addressing fraudulent activity in the cryptocurrency space. It also highlights the importance of security measures and proactive responses to prevent further harm to investors.
The incident underscores the risks associated with decentralized finance (DeFi) and the need for greater security measures and regulations to protect investors in the cryptocurrency space. As the use of DeFi and blockchain technology continues to grow, it is important for industry players to prioritize security and transparency to build trust with their users and prevent fraudulent activity.
The compensation provided by Huobi and Gala Games also serves as a reminder of the potential for cryptocurrency to facilitate positive change and provide financial relief to those affected by fraudulent schemes. By working together to address the issue, these firms are helping to build a more secure and trustworthy ecosystem for cryptocurrency investors.