On April 3, Huobi released an official announcement, announcing that it has negotiated with Gala Games to complete the compensation plan for users damaged by the pGALA additional attack incident, with a compensation amount of 50 million US dollars. The announcement shows that this compensation will be jointly borne by Huobi and Gala Games, among which Huobi will provide 25 million USD equivalent in cash and equity as compensation for damaged users, including: 15 million USDT and 10 million equivalent equity compensation; similarly, Gala Games Damaged users will also be provided with node compensation equivalent to 25 million US dollars. The above-mentioned compensation plan will be launched within this week.
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To restore the truth of the pGALA incident, Huobi and Gala Games sued pNetwork
At 4 oclock in the morning on November 4, 2022, because the multi-chain routing protocol pNetwork minted more than 1 billion US dollars of pGALA tokens out of thin air on the BNB chain, and sold them on PancakeSwap, the GALA tokens on the BNB chain went from 0.04 US dollars fell directly to 0.0000045 US dollars.
Subsequently, due to the huge price difference between the price of GALA on the chain and the centralized exchange, a large amount of funds poured into the purchase of GALA tokens on the BNB chain and recharged them to the centralized exchange for sale. Due to pNetworks malicious concealment, Huobi did not close the recharge channel in time without knowing it, and the price of GALA tokens on the platform also dropped from US$0.04 to US$0.0003, resulting in huge losses for relevant users and Huobi.
From 9 a.m. on November 4th, Huobi released five consecutive announcements on the progress of handling abnormal events on the GALA Token chain, and tried its best to recover user losses. On the contrary, pNetwork did not release the post-event analysis of the pGala accident until 2 am on November 6, and has been avoiding the improper profits it promised to distribute to users.
According to the analysis report, at 1:52 am on November 4, the team noticed a configuration error in GALAs pNetwork cross-chain bridge. Due to a misconfiguration, the ownership of the pGALA smart contract deployed on the BSC has been secretly taken over. The funds involved in the fund pool were 400,000 US dollars, and the attacker who obtained the ownership of the smart contract did not launch any attacks at that time. At 3:11 in the morning of the same day, pNetwork contacted Gala Games to decide to suspend the cross-chain bridge activities and drain the pGALA/BNB PancakeSwap pool through the white hat operation. At 4:13 a.m. on the same day, pNetwork issued 27,814,200,000 unsecured pGALA tokens to drain the above liquidity pool; and then issued another 27,814,200,000 unsecured pGALA tokens.
As mentioned above, at 4:28 am on the same day, Gala Games and pNetwork tweeted to indicate the problem, reminding community users not to buy GALA tokens on the BNB chain. After the dissuasion was ineffective, at 4:29 in the morning, pNetwork chose to continue draining the pool in order to prevent users from pouring into the added fund pool from being attacked by potential attackers. At 6:16 AM, Gala Games and pNetwork chose to stop draining the flow pool. So far, 12,977 BNB have been withdrawn from pNetworks drain pool. It was not until 7:03 in the morning that Huobi shut down the Gala recharge function on the BNB chain.
According to Huobi’s announcement of Truth Explanation for the GALA Incident at 19:03 on November 6, the pNetwork team has never stated that it will attack the GALA token vulnerability by issuing a large number of Tokens, completely concealing its attack behavior from the exchange , and within 50 minutes after contacting the exchange, exploited the contract loophole to issue 55.6 billion tokens to carry out the attack without giving the exchange any time to react. After the investigation, it was found that the vulnerability was due to pNetwork engineers mistakenly leaving the key in the contract 67 days ago, leaving hidden dangers for subsequent tragedies. After analysis, Huobi believes that the behavior of pNetwork is not a so-called white hat attack, or a hacker attack with malicious profit as the ultimate goal. The white hat attack is just an illegal excuse sought by its team to avoid legal sanctions.
So far, the whole picture of the incident has been restored. In the final analysis, the incident was caused by pNetworks negligence, infringement intervention, and intentional concealment.
According to previous Cointelegraph news, the GameFi project Gala Games announced on March 20 that it has filed a lawsuit against the cross-chain bridge pNetwork used by GALA on the BNB smart chain. Gala stated that the pGALA incident has caused losses of more than 25 million US dollars, and will claim 27.7 million US dollars from pNetwork to pay related losses and compensation. If the lawsuit is successful, any losses (less legal fees) will be converted to $GALA and destroyed. At the same time, more relevant injured third parties will be invited to contact their legal team for joint claims.
Huobi has now contacted the legal team of Gala Games and will cooperate with Gala Games
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User interests come first, Huobi revealed that PGALA will replace the new currency ROCK
Although Huobi suffered a huge loss in this incident, it still puts user interests first and does its best to protect user assets. In addition to issuing announcements at the first time and implementing relevant measures to recover user losses, it also communicated with pNetwork and Gala Games many times, and took legal action to protect rights. However, due to pNetworks inaction, it will take a lot of time to pursue liability and pay compensation, which will cause even greater losses to damaged users and platforms.
In this regard, after 4 months of negotiation, Huobi and Gala Games recently announced a strategic cooperation. Based on the integration of the Gala Layer 1 public chain, it will provide high-quality investment and currency listing support for the top projects in the Gala ecosystem. Cooperation will be carried out around ecological construction, brand linkage, project development, and community consensus. At the same time, taking advantage of the advantages of both sides in terms of ecology, resources, and branding, we will jointly launch a compensation plan for damaged users of pGALA’s additional issuance, and try our best to recover user losses as quickly as possible and maintain the brand reputation.
Regarding the upcoming compensation plan, the relevant person in charge of Huobi revealed: Huobi will support the exchange of PGALA tokens for the new token ROCK (Rock DAO), and will launch ROCK on the entire network after the currency exchange is completed. The token is a Web3 game ecological token initiated by Gala Games and cooperating with Huobi and Tron. The total amount of tokens is about 6.02 billion ROCK, of which 1.4 billion will be used as the reserve fund of Rock DAO, which will never enter the secondary market and will only be used for governance and voting. Gala Games holds 700 million and Huobi holds 700 million 100 million. More details will be announced in the form of official announcements.
The pGALA compensation, from the beginning to the end, reflects the responsibility and responsibility of Huobiji Gala Games to the interests of users. It is hoped that in the face of such incidents, there will be more exchanges and project parties in the encryption industry who are brave enough to take responsibility and defend the interests of users, and work together to promote the healthy development of the industry.
