A Mistaken Dividend at Gate Sent One Account to Negative $1.5 Million

On Wednesday, the crypto exchange Gate applied a stock dividend to the wrong contract. Traders who had taken short positions were cleaned out despite little movement in the price.

Gate blamed the mix-up on two assets sharing the same ticker. The exchange said about 200 accounts were affected and that it would pay the losses.

How the Dividend Mistake at Gate Happened

On Monday, Gate published a notice about Franklin Resources, the US asset manager behind Franklin Templeton. That notice said a $0.33 per-share dividend from the company would be passed through BENUSDT at 08:00 UTC on Wednesday.

BENUSDT is a perpetual futures contract, meaning it tracks an asset's price without ever expiring. Under Gate's rules, longs — traders betting on a rise — were set to receive the payout, while shorts, who bet on a decline, were expected to pay it.

Screenshots shared by traders, however, showed BENUSDT trading near $0.000585, a price that belongs to a low-value crypto token with the same ticker, not to a stock. A $0.33 charge applied to a contract at that level is roughly 564 times the contract's price.

Why Shorts Were Wiped Out While the Price Sat Still

Leveraged traders must deposit cash as margin to cover losses. When that cash is used up, the exchange forcibly closes the position — a liquidation.

The margin was used up entirely by the dividend charge itself. The exchange's notice had cautioned shorts that the payment could trigger liquidation if their balances ran low.

Some accounts drew on one shared margin pool for several bets, which meant other positions were closed as well. On X (Twitter), @SmallPig0526 posted a screenshot that showed an account sitting at negative $1.46 million.

Long positions saw the opposite, with unusually large credits appearing in balances. It remains unconfirmed whether any of those funds were taken out.

Gate Says Users Will Not Be Left to Pay

Godot, who heads Gate's creator community program, said the platform identified and resolved the problem within minutes. Balances were being restored, he added, and Gate would absorb the full loss.

“Today at 16:00 UTC+8, while processing the BEN contract funding rate in accordance with the announcement made two days ago, we encountered an error due to duplicate names, affecting a total of 200 accounts…The resulting user balance display issues are being resolved progressively. All users have incurred no losses whatsoever, with Gate bearing the full responsibility,” Godot wrote in a post.

No detailed incident report has been released by Gate so far. The episode lands as Gate expands into stock products, including Japanese stock trading added in August.

Rivals are taking the same route. The NYSE recently signed an agreement to bring tokenized US stocks to crypto users.

What will happen to the credits issued to long positions is still undeclared by Gate.