In brief: Gate Exchange says it will cover losses after a trading error tied to a dividend payment affected roughly 200 accounts. Short positions on the BENUSDT perpetual contract were liquidated even though the crypto token’s price barely moved, and one screenshot showed an account balance of about -$1.46 million.
A dividend announcement meant for a stock-related contract became a costly lesson in how small operational mistakes can carry outsized consequences in cryptocurrency trading. Gate Exchange applied a $0.33-per-share payment to BENUSDT, a perpetual futures contract whose ticker matched that of a low-priced digital asset.
At around $0.000585, the token’s price was nowhere near the value of a share in Franklin Resources, the asset manager behind Franklin Templeton. The dividend charge was therefore roughly 564 times the contract’s quoted price, draining margin from short sellers and triggering liquidations without a comparable market move. Gate attributed the incident to two assets sharing the same name and said it would assume responsibility for the losses.
The episode also exposed a less visible source of financial risk: a trader’s account can be affected not only by price swings, but by how an exchange maps corporate actions to digital assets. In leveraged markets, a mistaken debit can be enough to force trade execution at the worst possible moment.
How the Gate Exchange trading error triggered $1.5 million in account losses
Gate announced on Monday that a $0.33 dividend associated with Franklin Resources would be processed through BENUSDT at 08:00 UTC on Wednesday. Under the exchange’s stated mechanism, long positions receive the payment while short positions are charged.
The problem was the contract identifier. BENUSDT was trading near $0.000585 and represented a cryptocurrency token—not a share priced in dollars. Applying a $0.33 charge against that contract created a debit far out of proportion to its market value, making the dividend itself the immediate cause of the liquidations.
Why the dividend charge liquidated short positions
Leveraged traders post margin as collateral against potential losses. When charges consume that collateral, an exchange may automatically close positions—a process known as liquidation.
That mechanism explains why short sellers could lose money even as BENUSDT’s price barely changed. The dividend debit depleted available margin, and accounts using shared collateral pools were exposed across multiple positions; one screenshot posted on X by user @SmallPig0526 showed a balance near -$1.46 million.
Long traders experienced the reverse effect, with unusually large credits appearing in their balances. Whether any of those funds were withdrawn was not established, but the contrast highlights how a single processing mistake can produce sharply different outcomes on either side of a trade.
Gate says it will cover losses after the exchange glitch
Gate community program lead Godot said the platform detected and corrected the problem within minutes. He added that account balances were being restored and that Gate would take responsibility for the affected users’ losses.
The exchange said roughly 200 accounts were impacted by the duplicate asset name. Its commitment to cover losses addresses the immediate account losses, but the incident still raises a broader question for any crypto exchange: how should systems verify that a corporate-action payment belongs to the correct contract before it reaches traders’ margin?
What the incident means for cryptocurrency trading
For a trader holding several leveraged positions in a shared margin account, an incorrect debit can travel far beyond the contract where the error began. The Gate episode shows why exchange safeguards must check asset identity, payment size and contract denomination together—not rely on a ticker match alone.
That distinction matters as platforms add more products linked to stocks and other traditional markets. In fast-moving digital markets, reliable trade execution depends on operational controls as much as it does on price feeds; the central lesson is that a ticker is not proof of an asset’s identity.
