GALA Price Drops 20% After Founders Battle Court Over $130M Token Theft

Key Takeaways:

• GALA token has lost 20% of its valuation since Aug 31.
• While technicals are bullish, the on-chain metrics suggest more pain by the Q3 end.
• The latest court crossfire between Gala Games co-founders stirred the bears.

YEREVAN (CoinChapter.com) — Gala Games (GALA) price has shed 8% of its value in the previous 24 hours and was trading for $0.016 on Sep. 4. Broadly, the price has dropped 20% since Aug. 31.

GALA Price Eyes Falling Wedge Rebound

The GALA price traded within a technical setup named the ‘falling wedge‘ throughout 2023.

The formation entails an incremental price decline between two converging trendlines and promises a break equal to the maximal wedge height if the token can breach the resistance. Thus, the falling wedge pins the target GALA price at $0.042 by the quarter’s end, an over 150% jump.

GALA Investors Grew

However, while the GALA technicals paint a bullish picture, the trading volumes increased by over 270% in the previous 24 hours. A high trading volume reading and a price decline point to a selloff, predicting more pain ahead for the coin.

Moreover, the number of GALA retail investors grew after the GALA v2 rollout in May 2023. Addresses holding 0-1,000 GALA filled their ranks in Q2, going from 121,000 on mid-May to 233,000 on Sep 4.

However, whales exited the market in the same time frame. According to crypto tracker CoinMarketCap, addresses holding over 100,000 coins receded from approximately 9,000 on May 15 to just over 500 on May 19 and haven’t filled the ranks since, dropping further to 250 by Sep. 4.

The departure was accompanied by a 20% price drop in 5 days, indicating a possible dump.

Addresses holding 1,000-100,000 GALA followed suit, losing 82,000 wallets in mid-May and dropping to 14,000 holders by Sep. 4.

Given the on-chain red flags, a full recovery to the technical target is unlikely. Additionally, the latest news of the internal dispute between Gala Games founders intensified the bearish expectations.

Gala Games Co-founders Faces Court

On Aug. 31, Gala co-founders Wright Thurston and Eric Schiermeyer filed lawsuits against one another in a Utah District Court.

Schiermeyer, the current Gala Games CEO, asserted that Thurston and his investment firm, True North United Investments, stole $130 million worth of tokens tied to the ecosystem in 2021.

The accusations further claim that while Thurston initially put the said amount in a wallet under the company’s control, he then allegedly moved the sum to 43 separate wallets. According to the filing, Thurston exchanged or sold the tokens in a “complex web of obfuscatory transactions” between September 2022 and May 2023.

Thurston denied the accusations, insisting that he held the tokens in secure wallets for Gala. Moreover, he retaliated with another lawsuit, also on behalf of Gala. The latter accused Schiermeyer of causing Gala to “sell off and waste millions of dollars in company assets” and lent millions of Gala’s funds to himself for personal purchases.

While the court battle between co-founders is not directly linked to the price action, the negative hype could damage the platform’s reputation. Subsequently, the GALA token would endure more red candles in the upcoming sessions.