The price of a GALA token on crypto exchange Huobi recently plummeted to nearly zero, stemming from a maneuver carried out by pNetwork, which locked up GALA on the Ethereum blockchain and re-minted it as “pGALA” on the Binance Smart Chain.
The incident began when the Gala Games community suffered a scare late November 3 after a wallet printed over $1 billion worth of GALA tokens, tanking the asset’s value by nearly 30%. pNetwork quickly responded that it provides routing infrastructure services for DeFi and Gaming tokens, including GALA.
“All GALA tokens on Ethereum, as well as the underlying bridge collateral are safe,” pNetwork tweeted, explaining that the trouble was due to some misconfiguration of the pNetwork bridge. The platform’s stated plan is to mint out a new, fixed version of the pGALA token sometime soon.
Following this incident, Huobi decided to delist the GALA/USD pair and to convert GALA into pGALA to protect user assets. The exchange also referred to pGALA as a “meme token,” claiming it is unrelated to GALA.
Huobi has alleged that the GALA incident was not a white hat operation as pNetwork claimed, but an attack that gave the protocol a $4.5 million profit. “In its dealing with this incident, Gala and pNetwork teams never tried to reach Huobi via official communication channels to confirm the security and feasibility of their plans. Rather, they acted in bad faith and abused their management permission on BNB Chain by minting over 55.6 billion GALA tokens for profitable sell-offs,” said Huobi.
pNetwork has responded to the allegations, stating that all actions were agreed upon in advance with Gala Games and that Huobi was notified Thursday at 7:24pm UTC. Huobi purportedly acknowledged the emergency within two minutes but blocked deposits several hours later. pNetwork claimed that it has not made any profit from this operation and that it aims to minimize damage caused by the compromised pGALA contract.