Cryptocurrency exchange Gate suffered a major operational error on Wednesday after applying a $0.33 per-share stock dividend for Franklin Resources to a micro-cap crypto perpetual contract, triggering forced liquidations that left one user account at negative $1.46 million.
Key Takeaways:
- Gate erroneously processed a $0.33 dividend onto the BENUSDT perpetual contract tied to a token trading near $0.000585.
- The fee equaled roughly 564 times the contract's price, draining margin and triggering liquidations across approximately 200 accounts.
- One account screenshot shared on X by user @SmallPig0526 showed a negative balance of $1.46 million.
- Gate creator community program lead Godot confirmed the exchange will fully cover all user losses and restore affected balances.
How a Duplicate Ticker Triggered Liquidations
On Monday, Gate posted an announcement stating that a $0.33 per-share cash dividend from Franklin Resources, the parent company of asset manager Franklin Templeton, would be processed through the BENUSDT perpetual futures contract at 08:00 UTC on Wednesday (16:00 UTC+8). Under Gate's rules for perpetual contracts, long positions receive dividend distributions while short positions pay them.
However, the exchange routed the adjustment to a low-value cryptocurrency contract sharing the same BEN ticker symbol. With the BEN token trading at approximately $0.000585, the $0.33 charge represented 564 times the contract's market value. The outsized charge immediately drained the margin balances of short traders, causing the exchange's automated risk engine to liquidate positions. Because several traders shared a single margin pool across multiple bets, non-related positions were force-closed as well. One screenshot published on X by @SmallPig0526 displayed an account balance dropping to negative $1.46 million, while long positions received massive cash credits.
Exchange Response and Equity Expansion
Godot, who heads Gate's creator community program, stated on social media that the exchange identified the duplicate ticker issue within minutes and began restoring account balances. Godot confirmed that 200 accounts were affected during the 16:00 UTC+8 funding payout and emphasized that Gate is bearing full financial responsibility, ensuring users suffer no net losses. The exchange has not yet disclosed whether any of the unearned credits issued to long traders were withdrawn prior to account freezes.
This incident comes as cryptocurrency venues increasingly compete with traditional finance by introducing equity derivatives and tokenized stock products. Gate previously expanded its product suite by introducing Japanese stock trading in August, mirroring wider industry moves where tokenized stocks capture market share.
Why It Matters
This event highlights the severe operational risks that occur when centralized cryptocurrency exchanges integrate traditional corporate actions without rigorous ticker isolation. Routing equity dividend calculations into digital asset perpetual contracts can break risk management models instantly, causing cross-collateral liquidations across unrelated positions. As platforms accelerate the rollout of hybrid financial products, exchanges will face growing pressure to implement strict validation checks before automated settlement cycles execute.
